Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Artisan Partners Asset Management First Quarter 2013 Earnings Conference Call. My name is Frances, and I’ll be your conference operator today. At this time, all participants are in a listen-only mode. After the prepared remarks, the management from Artisan Partners Asset Management will conduct a question-and-answer session. Conference participants will be given instructions at that time. As a reminder, this conference call is being recorded. At this time, I would turn the call over to Makela Taphorn, Artisan’s Director of Investor Relations. Please go ahead.

Good afternoon and thank you for joining our conference call to review Artisan Partners Asset Management's results for the first quarter of 2013. Opening the call today are Eric Colson, our President and Chief Executive Officer and C.J. Daley, our Executive Vice President, Chief Financial Officer and Treasurer. Before Eric begins, I would like to remind you that our first quarter earnings release and related supplemental presentation materials are available on the Investor Relations section of our website at www.artisanpartners.com. I would also like to remind that the comments made on today’s call and some of the responses to your questions may be our forward-looking statements relating to Artisan Partners and are subjects to risk and uncertainties. Factors that may cause our actual results to differ from expectations are listed under the caption forward-looking statements in earnings release and are detailed in our filings with the SEC. We undertake no obligations to revise these statements following the date of this conference call except as required by law. In addition, some of the company's remarks this morning includes references to non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release and exhibits, which are posted on the Investor Relations section of our website. With that I will now turn the call over to our President and Chief Financial Officer Eric Colson.

Thank you, Makela. Good afternoon, everybody and welcome to the Artisan Partners Asset Management business update and quarterly earnings call. I’m Eric Colson, CEO and I’m joined today by C.J. Daley our CFO. As we stated on our road show, we are in a talent business. Our people are the essence of who we are and they define our business strategy. So, we know that time is a precious asset. We value time very highly, so I thank you for your time today and hope you find this discussion useful. I want to spend the first couple of minutes today reviewing the foundation of our business and who we are, mainly because it will set the tone for our communication. Then I will review our long-term business strategy and approach using the quarter as a backdrop. We have a business philosophy and framework for how we approach the invest management business and we want this review to reflect that. Once I am done, C.J. will take the lead on walking through our financials and our transition to a public company. Flipping the slide two, we have a basic set of business facts. The foundation to our business was 1994 by our founders Andy and Carlene Ziegler. At that time, two secular trends that were taking hold in the market shaped our growth strategy, free agency or talent movement and open architecture choice. When started the company, we had one team and vision shaped by these trends, and 18 years since our founding, the attraction of our business model has allowed us to selectively leverage talent movement. We now have five autonomous investment team highlighted on the lower left of the slide. Open architecture provided investors with choice and through our distribution network, we have grown to over 80 billion across…

Thanks, Eric. Good afternoon. Slide 9 starts the review of our first quarter results. As of March 31, 2013, our company's assets under management were $83.2 billion, a 12% increase over AUM at December 31, 2012, and a 25% increase over AUM at March 31, 2012. The increase during the first quarter was achieved as a result of $2.2 billion of net client cash inflows, which equates to a 3% organic growth rate quarter and a 12% annualized growth rate as well as 9% market appreciation. The increase in AUM over the last 12 months was achieved as a result of 6.6 billion of net client cash inflows, a 10% annual organic growth rate and 15% of market depreciation. Average AUM for the first quarter was $79.2 billion, so our ending asset under management was 5% higher than average AUM in which recorded our revenues for the quarter. March 31, was the end of our first, but partial quarter as a public company and included numerous transactions related to our initial public offering. Our GAAP results includes significant charges related to the reorganization including mark to market expense of our pre-IPO partners equity and other compensation related charges incurred as a result of the IPO doing $476 million. The quarter also included a mark to market gain of $25 million on our contingent value right liability. In the previously disclosed charge for severance and cash retention awards that are ending 2013. We present adjusted earnings on adjusted shares, which represents our earnings adjusted primarily for pre-IPO compensation expenses, so on an adjusted basis earnings were $33.2 million or $0.47 per share for the quarter. Keep in mind that this figure includes a $0.09 reduction for the cash retention expenses and a first quarter severance charge. As a result of these…

Thanks, C.J. In closing, we are proud of our business model and investment results and we appreciate our success in the IPO and the competency shown in us by becoming shareholders. We will communicate to you about our business in a way that we think about it and we will provide information for your insights and knowledge. We appreciate your time and your interest. We will now open the call for questions.

Thank you. (Operator Instructions) Your first question comes from the line of Bill Katz from Citigroup. You may proceed.

Thanks so much. Actually I have one quick small question and a couple of bigger picture questions. C.J., when you said your mid-40s on the comp ratio is that before or after the equity bids?

That's after the equity grab. As we grow and issue more equity and the equity starts to amortize on a fully loaded basis in five years, we'll have four quarters worth of amortization and a growth on the upside.

Thank you. Eric, you mentioned some constrained mild if you will and does the allocation go anywhere? How constrained if at all are you by having sort of an equity centricity and has that shift you thinking of free cash flow usage from the team perspective. Then maybe you could triangulate what you are seeing outside the United States given the 30% annualized growth rate in new business there?

Yes. So, we've seen the equity flows have been fairly positive here. I think it hasn't changed what we look at for new investment teams or what to invest in the business. And, outside the U.S., it's been fairly strong for us on the flow coming in a little weaker than the U.S., but when you look at our pipeline, it looks quite strong 50% coming in from outside from the U.S. Did I answer your question, Bill?

Part of it, I guess, the question is in terms of, you talked about asset allocation being important point differentiation for your franchise and when you look at some of your other competitors, they have a bit more of diversification. Of course that asset allocation including alternatives, fixed income, if you will, obviously doing well on the equity side, so I just was wondering where you are into the evolution you are thinking in terms of other teams at this point in time or is there just enough momentum in the core business now that's still more of a selective approach?

Certainly. My reference to the asset allocation was really addressing the seasonality effect that's occurring in the marketplace right now that we've seen in our view more investors be disciplined within asset allocation this year using their target and reallocating and rebalancing back to equity, so that asset allocation effect has been beneficial for us as opposed to us trying to diversify across other asset classes. If we find a good asset allocation team or macro team or team that can play the asset allocations spectrum, we are open to that and adding them, but my comment in the opening remarks was really around the seasonality effect and the increase in equity assets.

Okay. And, just one last one for me and thanks for taking my questions. If you add back the severance charge of $9.3 million to your adjusted operating income you get adjusted margin about 43%, and so was curious as you think about go-forward, is that a reasonable run rate to reinvest back in the business. I think, during the road show, you had mentioned that you think can get it to mid-40s, but you've governed that just given the need to reinvest. So, the question is do we get there fast-forward and we are sort of stopping from here, or is there more upside from here?

Bill, I think it's a combination of offsetting that growth. The growth will take the margin up, but we have to start layering in the equity comp, so I think this quarter with the strong growth in both, the market and organic growth, you saw that spike, but we'll be layering in some equity compensation expense over the next coming quarters as we're doing our first public equity grant. So, our thinking really hasn't changed around that mid-40s over the next couple of years.

Okay. Thanks a lot, guys.

Your next question comes from the line of Michael Kim from Sandler O'Neill. You may proceed.

Good afternoon. First, can you just talk about RFP activity in the pipeline in the institutional channel in terms of some of the moving parts that you may be seeing across the various teams and then related to that, what's the feedback you are getting from consultants as it relates to kind of rebalancing the replacing activity?

Hi, Michael. It's Eric. The institutional client base and even the intermediary channel was very disciplined this year in our minds. We've seen past year's where groups were more tactical or they would maintain their fixed income allocation despite their asset allocations they didn't issue rebalance back their equities or other asset classes. This year, we've seen more discipline in rebalancing, so we saw a quite a bit of activity in the intermediary channel and that's also helped our pipeline and our fee activity and we look year-over-year, we've improved on the activity with more search opportunities, more RFPs and a broader allocation across our strategies.

Okay. Then maybe question for C.J. just to kind of follow-up on. On the margin discussion, it does seems like there could be some pressure on fee rates is maybe the mix shift towards separate accounts in new strategies and then also a fair amount of your expenses are variable, so just wondering where you kind of see the incremental leverage in the model beyond compensation. Are there further efficiencies in G&A or occupancy that you can kind of move the needle, if you will?

Yes. I mean, there are just efficiencies built in our model. Approximately 65% of our expenses are variable. That leaves 35% that there's leverage just by the nature of our business, then our assets can grow to some point without us having that additional infrastructure. So, there's natural leverage in our model. And as we look out to next couple of years, we see as we continue to grow, we see our margin increasing, but being offset by the luring the equity compensation expense.

Got it. And, then just one clarification, the cash retention expense going forward, did you say you expect an incremental $3 million of related cost in the second quarter and then what's the outlook beyond that? Is there any further cost in the second half of the year? Thanks.

Yes. That was a retention award that was issued in 2011. As we were thinking about our initial transition from a partnership to a public company and that amortization in a $2 million to $3 million range ends in December of 2013, so you will see $2 million to $3 million of expense each of the next three quarters and that will cease to exist.

Got it. Thanks for taking my questions.

Thanks.

Your next question will come from the line of Marc Irizarry from Goldman Sachs. You may proceed.

First question, just on the fee rate, I think you said 76 basis points flattish. What impact if any did the day count have on that? Does that pressure it? Then also you said 30% of your client inflows are coming from non-U.S. clients, so I am just curious as you grow that business, what sort of fee compression if any should we expect to see from that?

Yes. Hi. Marc. How are you? So, I think, what we saw this year was at least in this quarter we had fair amount of activity in our pooled vehicles, whereas in last year we saw a fair amount of growth in a separate accounts and the major impact to our fee rate is going to be which channel we add assets. So, this year we were seeing a trend towards the pooled vehicles, which has helped our fee rate, but as we've discussed we see over the next several years as we continue to build our assets overseas which are more through separate accounts, we'll see that start to trend down a couple of basis points as we grow.

Okay. Then, Eric, Any update on talent acquisitions and just maybe this gets back to sort of the business mix in terms of your assets. You said you've had a lot of conversations throughout the road show process. How should we be thinking about talent acquisitions in terms of timing and bring new teams up?

Certainly, Marc. There is no set timing that we can pinpoint and say that we are going to do one or two teams every year. Comments earlier were around the amount of information and data that's coming through the public process provided us more exposure into the marketplace, so our networks expanded. We will continue to come through those networks and we will continue to work with individuals and teams to see if they are fit with our organization, but as of today, we have a few teams that we are looking at and talking to, but no specifics on any on boarding.

Okay. And, then just in terms of flows, can you give us some color on flows by strategy, I guess, and also particularly for strategies like global equity that just hit the three-year number. Are you starting to see a pick up there, so maybe just a little bit more color on maybe capacity by strategy and also global equity now?

Certainly. We had a good quarter. The Global Value team continued to do well. The Global Value strategy was a very diverse asset mix coming from both separate account and pooled vehicles. Now there is more assets coming in the pooled vehicles in a separate account and had a good mix of clients coming outside the U.S. That strategy will slowdown, or that team will slowdown its assets, because you know we have soft close on our international value strategy and we've closed the separate accounts on Global Value. The other teams, clearly, the global equity team has done well with the international equity strategy. And, as you mentioned the global equity has hit its three-year track record and has been rated five stars by Morningstar, and you see the pipeline building nicely and the global equity for the international growth strategy and global equity, so we think that will balance out our flows more in line over the next year. Currently, we are seeing quite a bit of a continued demand for our growth team with the global opportunities strategy, but the team overall had nice flows and it has quite a bit of capacity with global opportunity and some capacity lap in small cap growth. Our U.S. value team has performed quite well in the midcap value over the last couple of quarters and small cap value has been off to market bid and value equity is starting to show a nice pipeline for us and we've had obviously a lot of wind in our back with regards to the emerging markets asset class. The emerging market's performance long-term has been 100 or so basis points behind the index since inception. We lost a significant piece of business there, but we also gained a large account around $200 million in emerging market, so there's still quite a bit of opportunity in [EM] and we continue to look for opportunities there.

Okay. Then just quickly on EM. Did you in the pipeline any redemptions that you see coming from EM or sort you sort of stem the tide there?

We have some clients that were watching, but there is no clients that has indicated to us that we see assets leaving. I mean, we've seen a very healthy pipeline there and we are the nice diversifier to many of the assets and assets allocated into ETFs. I mean, if you look at the emerging market's ETF, it's one of the largest funds in the marketplace and I think the March quarter is the first time you saw some ETF flows go negative and it was in the bottom-five versus December and January had an extraordinary flows into the ETF. And, those flows that are leaving are looking for products that will diversify against that large market cap orientation. So, we continue to see quite a bit opportunity there, but we are cautious on the clients given the performance lag.

Okay. Great. Thanks.

(Operator Instructions) Your next question is from the line of Robert Lee from KBW. You may proceed.

Thanks. Good afternoon and congratulations on your first earnings call. Let's see, a couple of quick questions. Most of mine have been asked, but you clearly have a strategy from time-to-time opening and closing products, maybe capacity, but it flows and what not ebb and flow. I mean, can you maybe update us? Are there any products right now where maybe you are seeing a pretty strong flows or you are thinking there maybe need for at least the temporary closure or conversely any product that maybe are close, but even if they are still getting flows, you are thinking you have capacity now to open more broadly.

What we do is spend quite a bit of time on the mix of assets, where we think it's extremely important to manage the fee rate and further diversification. At times you see strategies go out of favor or performance slide and we've opened for a limited capacity. At this point, we don't have any strategy that we are opening for capacity and growth or just philosophy of assets and to manage our mix. The area that we continue to focus is the Global Value team and we are closed in the international value strategy and we have closed the separate accounts in Global Value by maintain an open position in our pooled vehicles and we saw a nice flow in both, our mutual fund and our usage for Global Value that outpaced our separate accounts, so the management of that mix is going well and that's the only strategies that we are watching the mix.

Okay. And maybe looking at the new business pipeline, Eric, you did mention that you are seeing pretty good activity or good about your pipeline. Is it possible in any way to maybe you know get some kind of quantification or color around that? I don't know if there is a dollar amount of one, but not funded mandates kind of out there or some color on RFP activity up 10% year-over-year. Any given, we can kind of put our arms around a little bit?

Yes. I did mention that the overall activity is up year-over-year, so we would clearly have seen more assets and a number of searches when we look over the same time period that last year have a specific number on that. It's up at least 10% if not greater on that number. From a unfunded wins, we've been tracking that and for the second quarter that looks like currently in the second quarter we are approximately around $1 billion of unfunded.

Great. It's very helpful. One last question for C.J. and I apologize. There's been a long day for all of us, so this is probably obvious but when I look your comp and other $9 million of severance retention understanding that the retention is going to continue through the rest of the year, but when you talk about the $0.06 from the severance, you are not talking about that. That's how much earnings this quarter reduced by. That's just the relative to the Q4. Should be obvious.

Yes. That's the delta between this quarter and the prior quarters. In total, the impact just to this quarter would have been $0.09.

Great. All right. Just wanted to confirm. Thanks for taking my questions, guys.

Your next question is from the line of Cynthia Mayer from Bank of America/Merrill Lynch. You may proceed.

Hi. Thanks a lot. I guess, since you mentioned rebalancing, do you see any seasonality in the first quarter flows or is there anything in there that you think might not repeat? Bank of America/Merrill Lynch: Hi. Thanks a lot. I guess, since you mentioned rebalancing, do you see any seasonality in the first quarter flows or is there anything in there that you think might not repeat?

Hi. Cynthia, It's Eric. I do see quite a bit of just seasonality. If you back out and we ask ourselves, we see any change in people investment policy statements or asset allocation, where they have uptick allocation to public equities and we certainly haven't seen changes in the policies or asset allocation. I think, we've seen as I mentioned, people be more disciplined and strategic in their asset allocation through rebalancing as opposed to tactical asset allocation and that tactical asset allocation went against public equities a year and I think that probably muted the seasonality last year in 2012 and 2011, and people were more disciplined back to their strategic asset allocation. We also from a management structure standpoint, which is the mix of people allocate within an asset class. For example, equities, you managed the mix between passive and active, you managed the mix by [box] or by geography and we see more people looking at active strategy than balancing the mix given the explosion in passive assets. I think, you've seen a little bit balancing there. When you add that all together, it's hard to add that up and say that there is a real sustainable mindset that people are just hoping their equity allocations and it seemed more seasonal and more disciplined than years past.

When you've seen that pattern in the past, would you expect that to persist a little bit into second quarter just in terms of people making decisions, but then maybe putting the assets in later or taking longer to make the decision, so I am just trying to gauge looking at the flows, they are pretty good. Is there anything that we should assume doesn't continue into the second quarter simply because this is more of a first quarter activity? Bank of America/Merrill Lynch: When you've seen that pattern in the past, would you expect that to persist a little bit into second quarter just in terms of people making decisions, but then maybe putting the assets in later or taking longer to make the decision, so I am just trying to gauge looking at the flows, they are pretty good. Is there anything that we should assume doesn't continue into the second quarter simply because this is more of a first quarter activity?

I would state that this amount of activity is clearly a first quarter activity and that should decrease over the next couple of quarters and you see a little bit of uptick back in the fourth quarter and you will see more of a institutional and clients rebalance over time, but what the asset they came in, in the first quarter was primarily through the intermediary channels and more seasonal and I wouldn't extend those to second quarter.

Okay. And then, I guess, just to clarify something on the equity awards. Those are layering over five years, right? So, those are expenses of fixed amount, right? Not variable and? Bank of America/Merrill Lynch: Okay. And then, I guess, just to clarify something on the equity awards. Those are layering over five years, right? So, those are expenses of fixed amount, right? Not variable and?

Yes. That's correct. We plan to grant our annual equity in July of each year and we'll have five-year testing periods and typically what happens as you for accounting rule as you price them at the date of grant and amortize those pro rata over the five years.

Right. So, if for instance the market were to sell off, those would still be expense at the higher amount, because your based on our price of the stock at that time? Bank of America/Merrill Lynch: Right. So, if for instance the market were to sell off, those would still be expense at the higher amount, because your based on our price of the stock at that time?

Right. Correct.

Okay. Then, maybe last one a little bit on, can you give us a little color on the process of searching for teams and evaluating them? Is there anybody focused on that full time? Who is most involved in evaluating them? Are the founders still involved in it? Bank of America/Merrill Lynch: Okay. Then, maybe last one a little bit on, can you give us a little color on the process of searching for teams and evaluating them? Is there anybody focused on that full time? Who is most involved in evaluating them? Are the founders still involved in it?

Hi. Cynthia. It's Eric on that question. It is primarily comes to my desk, but we obviously have our analysts and our portfolio managers out talking to individuals and in many cases they give me names of people that impress them. Our founder Andy Ziegler is a strong founding board for ideas and if the name does come across, he would certainly pass along to myself and that new team, but new idea generation of Andy is limited. It's more of a sounding board and it's really the idea that come from a network. There's a strong group head hunters to bankers to peers that recollect ideas and bring to my desk and then we have a group that evaluates the opportunity.

Great. All right. Thanks a lot. Bank of America/Merrill Lynch: Great. All right. Thanks a lot.

At this time, we have no other questions. I would like to turn the call back over to Mr. Eric Colson for your final remarks.

Great. Thank you very much. We know it was a long day for all of you and truly appreciate your time and we are very pleased with the IPO and the results and I want to thank you for your time today.

And, ladies and gentlemen, this concludes your presentation. You may now disconnect and have a great day.