Hello ladies and gentlemen. Thank you for standing by. Welcome to Artisan Partners Asset Management’s Second Quarter 2014 Earnings Conference Call. My name is Keith and I will be your conference operator today. At this time all participants are in a listen only mode. After the prepared remarks management will conduct a question-and-answer session and conference participants will be given instructions at that time. As a reminder this conference call is being recorded. At this time I will turn the call over to Makela Taphorn with Artisan Partners.

Hello everyone. Before we begin I would like to remind you that our second quarter earnings release and the related presentation materials are available on the Investor Relations section of our Web site. I would also like to remind you that comments made on today’s call and some of the responses to your questions may deal with forward-looking statements and are subject to risks and uncertainties. Factors that may cause our actual results to differ from expectations are presented in the earnings release and are detailed in our filings with the SEC. We undertake no obligation to revise these statements following the date of this conference call. In addition some of their remarks this morning include references to non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release. And with that I will now turn the call over to our Chief Executive Officer, Eric Colson.

Thanks Makela. Welcome to the Artisan Partners Asset Management Business Update and Quarterly earnings call. I am Eric Colson, CEO and I’m joined today by C.J. Daley, CFO. Thank you for your time today and I hope you find this discussion useful. As of past call I want to reinforce our business model relative to quarter and go deeper into our business philosophy and approach that drives our results over a longer and more meaningful time period. This quarter, I will spend time discussing the environment we have developed to support success for our talent. I will dive deep into the elements that are crucial to creating this environment. Autonomy, alignment, growth and stability individually each carries value. We believe that the benefits of having them all work together with the right talent in place produces great synergy over the long term for our business. Once I’m done, C.J. will take the lead and walk through our financials. On the first fact page, page two of the presentation; I have two quick points to make. First, our overall AUM has increased to $112 billion from $107 billion last quarter. The growth in those numbers reflects market appreciation as well as positive client cash flows. Second, we have seen strong demand for our global equity team and its non-U.S. growth strategy. Over the years, our global equity team has built a robust franchise and the development of a broad group of decision makers has produced solid results and meaningful interests from a number of distribution channels and four strategies with realizable growth. We have also seen solid early interest in our high income strategy as it close to quarter with over $300 million in assets under management. Bryan Krug and his team are coming together well. He excelled in his permanent…

Thanks, Eric. I will begin the review over the second quarter financial results on slide 15. In summary for the quarter AUM increased $112 billion and net client cash flows are $558 million. This is our 11th consecutive quarter of positive client cash flows and represented 2.1% annualized organic growth rate for the quarter and year-to-date organic rate of 3.8%. Revenues for the June quarter over $208.5 million up 3% over revenues and preceding launch 2014 quarter and up 29% over the corresponding June 2013 quarter. Our adjusted operating margin rose to 46.5% up from 45.1% and reflects operating leverage in our financial model. Net income performance share on an adjusted basis was $0.84 per share compared to $0.78 per share in the March 2014 quarter. On July 15th, our board of directors declared a regular quarterly dividend of $0.55 per share. On a GAAP basis, we reported net income per share $0.42 for the current June quarter and on an adjusted basis as mentioned we reported an earnings of $0.84 per share. Our adjusted earnings measures remove the accounting impact of certain transactions related to our IPO and the complexities of our equity structure. These non-GAAP measures provide investors with the same financial metrics that we as management use to manage the company. Slide 16, is a review of our AUM for the quarter. Earning assets under management of 112 billion were up 4% from assets of 107.4 billion at March 31, 2014 and up 31% from our earning assets a year ago. Average assets for the June quarter were 108.2 billion up 2% from average assets in the March 2014 quarter. The increase in AUM during the June quarter was due to $3.9 billion or 3.7% in market appreciation and $558 million as net client cash inflows. Net…

Thank you C.J. C.J and I appreciate your time including shareholders, client and employees to understand our business better. I will now open the call for questions.

First, a fair amount of your strategies remain closed to some extent, so just wondering how you are thinking about flow prospects going forward. I know you've got a lot of capacity across your Non-U.S. and Global Strategies. But just assuming investor risk appetites remain somewhat uneven, just be curious to get your take on the flow profile in that sort of environment.

So, I think we feel we are very well positioned, our open strategies are picking up nice flow and we always coach people that it will be lumpy and that’s we are not a smooth asset gathers, we are more institutional lumpy flow. So, I think that from a product perspective, broker-dealer channel and the overall intermediary it seems to be very strong management to overall it’s been growing and we are picking up good market share in the overall intermediary channel and we had also a nice uptick over season internationally with some good wins as C.J. mentioned in Australia and the pipeline out overseas and institutionally still remains strong. So, I think the environment has affected us a bit in the past, we have grown strongly in core environment and we have grown slowly in great environment really if our goal is to remain disciplined to our business model, and really can’t control to flow our human behavior when dollars actually coming around, C.J. you have anything to add?

I don’t think I would add on the meaningful side I think we are where we expected to be would, where we thought this quarter was just investors pulling back and rebalancing out of some growth areas, when we saw growth and momentum stocks pull back in the March into April period. So, I think that’s been the one area that was a bit of surprise towards this quarter.

Okay. That's helpful. Then second, I know it is still a relatively small part of your overall AUM base, but the longer-term track records for the emerging markets team are still a bit challenged. So any incremental insights into the drivers behind the underperformance? Then at some point do you start to think about maybe taking more a proactive stance with that team?

The numbers are continuing to trail the index a bit, the folk of the underperformance for that team incurred in 2011 since then we have been moderately behind and the primary driver there around and asset class and asset flows really tasting the index return and again we saw an enormous amount of dollars go back into ETFs and the index and really reinforced that relative strength and price momentum that occurs by buying stocks and the index and our portfolio tends to have a high active share ratio, we intend to be out of the index quite a bit in the number and names and when you are out of the index, you are not getting that after flow support we continue to trail and we also saw that same issue occurring the value team so the value team it was again fairly concentrated in the number of names and outside the index and the flow that we saw in the last year and two years into the midcap value index was extremely high versus past years and that penalize this quite a bit we annualized our stock that were inside the index and outside the index and there is an extreme difference in return between the two driven by the continued push in dollar towards BTS but that’s been a technical factor that continues to push and the emerging market team has been very consistent to their process and producing a strong fundamental portfolio but once we start seeing some inconsistency in process and inconsistency in the talent there, then we start to waiver more; but we have always looked at having integrity in the people first, process and then the performance follows that and right now from what we see from a performance standpoint we are just fighting a technical factor.

Thank you. And the next question comes from Marc Irizarry with Goldman Sachs.

Great, thanks. Eric, can you just give maybe some historical performance across some strategies in terms of -- obviously it sounds like you'll continue to stick to your knitting, in terms of not having in terms of not having style drift in the strategies. But have you seen periods where there has been some near-term underperformance? How long do those extend for? And do you think your clients and the consultants understand that?

Yes, Mark. It’s each of the strategies sense their inception have had anywhere from a year to three year of underperformance versus their index and the peers and you can go through each of the strategies whether it’s midcap growth or international growth, the first couple of years have international values strategy has some fairly lumpy results, if you looked at '02, '03, '04, '05 that was really two good years, two top years and there was moments there where the three two numbers were difficult as well. And we’ve spend it often lot of time with our business leaders, the business leaders are dedicated each investment team to focus on clients service. And so we’ve spend a lot of time educating our clients about our process, what to expect and there’s not so much time right that people are willing to stick with you and I think as long as we can point to the consistency and understanding of why we’re underperforming and show proof statement to that, our client tend to stick with this quite well. Now there are a lot of other reasons in the market place right now, that we see institutional and even some of intermediary clients rebalancing and de-risking and taking money off the table. But I, top-line, I can pull some data for you and show you various cycles there with each team has done that and it’s a little bit more prolong in the emerging markets right now, but we’ve never really seen this much momentum around ETFs and index flows into a segment such as whether it’s a Chinese staff of emerging market ETFs.

Great. That’s helpful. And just C.J. for your on the comp expense, can you give us some perspective on just how much flexibility there is in terms of comp just given maybe given the one year numbers, I mean there’s sort more of a maybe fix component to the comp if you will, but I mean I’d imagine that there is some variability there, maybe specifically when you think about the mid 40% comp ratio what sort of the timeline to get there?

Yes. So in the comp area, I would approximately 70% of our expenses in the comp line is variable so there’s a quite bit of variability there it will fluctuate with increases and decreases in revenue but as you saw in this quarter there’s also leverage when we grow quarter-to-quarter to pick up some margin expansion because of that fixed component. So the mid 40s, it will take us, on slide 20 we’ve break up the comp ration, you’ll see that we’re currently in the low 40s but given moderate growth as we’ve seen over the last three to five years, as well as varying on the equity based comp expense, I think it will take us in the three to four years given those assumptions to get to the mid 40s.

Thank you. And the next question comes from Bill Katz with Citi.

Hi, this is Steve Fullerton filling in for Bill. First question, are you able to size the Australian AUM win that you had? And what is the depth of the opportunity there that you see? How much could we see come in from this?

The Australian market is looking, as C.J. mentioned is very market, I think we all know that positive to that market, but we’ve had some good attraction from two of the primary consultant down for various strategies and we continue to be supported by some of the global consultant so we’re quite optimistic on Australia overall but I don’t think we can give any specifics to that market place, really we have to see it through until this research process that our radiant service is final to really understand if what the final outcome will be.

Okay, great. Then just saying on the Non-U.S. topic, I guess, you talked about how the amount of relationships ticked up this quarter. Is there anything specifically that you are doing different? Any change in strategy?

No, no change in strategy we ended the last year about 55 relationships over these, we’re up to good 20 over the last, so we’re starting to see a little bit broader acceptance outside the U.S. I think we’ve spend quite a bit of time with our website we’ve put videos online we’re trying to leverage technology and marketing to broaden our footprint around the world. As well as I believe going public that help to build some brand identity as well. And it’s just a little bit more acceptance in the market place as who we are.

Thank you. The next question comes from Robert Lee with KBW. Andrew Donnantuono - Keefe, Bruyette & Woods: Hi, this is actually Andrew Donnantuono filling in for Rob. Just my first question is on specifically the High Income Strategy. Just kind of curious. The inflows for the quarter and going back to first quarter actually, would you be able to just give us a sense of which distribution channels are driving that? Then just on a relative basis, I know it is early days still, but just wanted to see how -- where you guys think the strategy has both performed and grown relative to your expectations when it was launched a few months ago.

Sure, the high income strategy is now 100% put together with all three analysts in the team located in Kansas City with Brian. So from an operational and from an investment point of view, we think we have the right foundation now to go forward. From a distribution standpoint we just right around 300 million under management primarily coming from the intermediary channel, mix of broker dealer and financial advisors into the mutual fund. And I mean outlook going forward, we are really looking to manage that and manage Brian’s time so that we are focused on the investment integrity of the strategy in the early phases of strategy, you have to watch asset flow either positive or negative in any significant way, so that doesn’t become distractive the performance and in the initial portfolio, the portfolio is what we expected. It’s a mixture of corporate and bank loans, it’s highly a differentiated from the index and peers, and so we feel that it’s inline to our expectations from an investment, operation and distribution, we feel it a little bit above where we thought it would be. Andrew Donnantuono - Keefe, Bruyette & Woods: Okay, great. Thank you. Then shifting gears just a tiny bit, I wanted to ask you about -- to the extent that you felt you have had success or could continue driving flows via -- getting Artisan's strategies on 401(k) platforms. Just wanted to know if you had any color there of late; and if so, what strategies have really been driving the flows onto 401(k) platforms?

Currently, the defined contribution segment still remains fairly flat for us and continued client share of the net new flows are going to target the date funds, primarily the proprietary target date funds. You have seen a few consultants and put together customized target dates and solutions that are making feel a little bit more optimistic for the future of target dates but as of late in the near term it still remains flat for us.

Thank you. The next question comes from Cynthia Meyer with Bank of America/Merrill Lynch. Cynthia Mayer - Bank of America/ Merrill Lynch: Hi, good morning. Just going back to some of the Value Strategies, it looks like a few of them have a really high percentage of cash, like 8% plus, up to 13%. I am just wondering; is that typical? Does that explain the underperformance? Or is it more securities selection? And then just more generally on the Value Strategies, when you guys have some strategies that are lagging like that, could you describe a little bit what, if any, extra steps you take in terms of reaching out to clients or distributors? Whether it is more presentations from PMs or from you guys, do you change the way you communicate at all? Thanks.

Cynthia, the value strategies tend to hold a little bit higher cash than our growth-oriented strategies certainly in 8% to 10% cash position over the last year it has been a drag I mean the market overall is up, 20%, 25% in the mid-cap and the small cap segments of the marketplace. Our value team has a more conservative approach to value investing and we fully expect the team that over those the last five years of the full market, especially in small cap and mid, this team should lag and it’s lagged in past years as well in up markets. So the team producing 20 plus percent return over the last five years and the index producing 20 and 22 plus return. Can be pointed a little bit to the cap position, we’ve also found a big differential in stocks that are outside the index. Cynthia Mayer - Bank of America/ Merrill Lynch: Okay, great. Then on the separate accounts, it looks like the flows turned positive. I am assuming that was -- I think you said overseas clients. So was that the Global Equity product? What changed there? Why do you think that that has ticked up? What types of clients were those? Thanks.

The mixture of institutional and although bit on the financial intermediary side of the business, it was primarily in the global opportunities, we saw some larger mandates come in as well as one good size account for international growth strategy.

Thank you. And the next question comes from Eric Berg with the Royal Bank of Canada.

Good morning. As I look at the big picture and I assess the overall flow picture, it looks to us here at RBC that the inflows have been fairly steady. And what has been driving -- again, on an overall Company-wide basis -- the decline in net flows has been a fairly sharp increase in outflows. I guess my question is -- and I have listened to you quite attentively, so maybe you have answered this question and perhaps I just need to sharpen my understanding. If the outflows are rising in the face of what has been admittedly some pressure on performance, does that mean that despite your discipline that just the message -- that the customers are not tolerating it? The message is not getting across? Or do you think I should reach a different conclusion about these growing outflows?

I would have a different conclusion I mean we are working with quite a few institutional clients that are rebalancing and rerisking and I would like to say that the rebalancing is occurring in the strategy that have core performance in the short run but we have seen quite a bit of rebalancing in our strategies that are having strong performance too. So, when I go through the data and look at where the rebalancing is coming from it is touched to all of our investment teams over the last quarter and year-to-date but it’s difficult for me to point to and say it’s because of performance and they are not understanding the strategy and it’s clearly been a couple extra accounts that we have lost around performance and that’s natural when you are going through a cycle but I have steady uptick primarily around the institutional marketplace rebalancing and derisking their portfolio as a bit.

That's helpful. Then just one, I would say, more straightforward question. Maybe not, but you will be the judge. As you compare the performance of your domestic or U.S. Value team versus your Global Value team, it is pretty striking, the difference, with the Global Value team seemingly doing much better. They are both value investors. They both are committed to sticking to a discipline. What is your best sense of why the global guys have done so much better, at least it appears, than the US team?

I think the U.S. value tends at a little bit more of a conservative approach, you can see a few more securities especially in our small cap and mid cap. So, it’s a bit more diversification there and the second point is that the U.S. value tends to have a little bit more of a value to more of a traditional value bank to them as oppose to global value being more intrinsic value oriented. And so there is slight new answer to their philosophical approach and process and a little bit concentration that occurs in the global value team than in the U.S. value team.

Thank you. And the next question comes from Surinder Thind with Jefferies.

Good morning, guys. I just wanted to touch base on -- previously you've spoken about the lifecycle of funds and ultimately getting them to like a maintenance phase. But what about the opposite? So once a fund has been soft closed, what are the considerations into maybe reopening that fund? Does it have to get to a certain level below capacity? Or how do you think about that process?

It’s a similar process of looking at the market environment of where we are at and where the investment team feels like it’s a good entry point to open up because as you open up it is quite a bit of investment back into CMA consultants again and reeducating the market place. So it’s a combination of time where the marketplace is at, what’s the overall dollars of the portfolio, it’s not simply; if the dollars deteriorate a $1 billion and one of the strategies, it’s time to reopen it. And it’s a fairly fluid conversation I have with each of the investment teams.

Okay, thank you. Then, just earlier you highlighted some of your thoughts on work around new strategies and stuff. I think in your monthly AUM disclosures you guys also note that you have roughly $40 million in a managed portfolio that is currently not available to clients. Now is that one strategy, or more strategies? And can you comment on what that is, what that strategy might be?

That’s a single strategy; it’s an internal strategy that we have listed on the balance sheet there as launched equity. And it’s a long short strategy managed by one of the teams, it’s the team that’s been taken about to agree the freedom, unlike all the strategies that we think about we like to take quite a bit of time to get those to market and understand the overall strategies. So at this point we’re not putting any plans in place to put that into a marketing and opening up to external investors.

Okay. Then typically, you mentioned it takes a bit of time. Is it a number of years before you think about that? Is it like a 3-year type of period that you try and at least evaluate? Or what kind of an incubation period do you guys generally think about for something like this?

We don’t think we have a set timeframe on it, it could be a couple of quarter, it could be a couple of years it’s really a comfort level with the investment team, where they are at and their resources, where they’re at in their current strategies. And do they feel that this is a strategy and a portfolio that will in place and be representative of the future and sometimes that just takes a few quarters and sometime it may take a few years. We put no timeframe to our launches.

Thank you. And the next question comes from Chris Shutler with William Blair.

Hey, guys. Good morning. On the Global Equity strategy, still seeing excellent long-term performance there, but no real pickup inflows yet. So just walk us through what we could see. When do you think we could see that strategy start to generate some more meaningful flows? And do you think the 1-year number there holds you back very much?

We’re starting to get more and more meetings with the global equity team both for the global small cap and the global equity strategy and that process that does take some time for consultants to put you on the buy list and move you up in the ratings. And what we have seen in the market place is the supply of global equity product is quite large, you can look at the new funds data coming out seems like every month someone is launching new global strategies. So it’s a highly competitive area, similar to probably 10 years ago in the U.S. large cap equity space. So we expect a little bit longer cycle than the capacity constraint strategy that’s in the small cap space where you would need three or four years, few $100 million and due to capacity constraints you can get some market a little quicker, in a more capacity or in a strategy with quite bit of supply in the market place, the timeframe to really expect assets to take more than the four, five year period that we’re seeing right now. Overall though the consultants are starting to put this high on research priorities, we’re starting to see some bio ratings and I think we’re seeing some early signs of this strategy starting to grow in the next year or two. And I fully expect like year or two that we would see good flow here. The performance on the one year, doesn’t really hold us back to give us a reason to say how is the portfolio positioned, most of the consultants the clients are looking at, the longer term performance and the short term performance to help some, getting understanding of what type of strategy they’re running.

Okay, understood. Then the only other question on the comp expense, for C.J. It was a little bit lower than we expected this quarter. I recognize the share-based comp is going to step up next quarter. But outside of that, how should we think about comp over the next few quarters?

Yes. I mean, I think what you saw this year, this quarter was the absence of the seasonal expenses in the first quarter which is would drove down a bit in the second quarter. So next quarter you would see it similar to this year, to this quarters quarter expect for the addition of the equity base comp.

Thank you. And we have a follow-up question from Marc Irizarry with Goldman Sachs.

Okay, understood. Then the only other question on the comp expense, for C.J. It was a little bit lower than we expected this quarter. I recognize the share-based comp is going to step up next quarter. But outside of that, how should we think about comp over the next few quarters?

No, we haven’t had any meaningful funding or announcements of assets leading over the first couple of three weeks here into the quarter. And looking at the rest of the quarter, it’s tough for us to know.

We will release July AUM around the seventh business day in August.

Thank you. This concludes our question-and-answer session and I would like to turn the conference back over to management for any closing remarks.

Thank you for you guys time today. C.J. and I did the call here from London for the second time, we did it as well last year and it’s good to get out of our offices and do the calls from various locations, and so we will continue our practice getting out of the offices and doing the earnings from various locations and we appreciate your today.

Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may all now disconnect. Have a nice day.