Hello, ladies and gentlemen. Thank you for standing by and welcome to Artisan Partners Asset Management’s Third Quarter 2014 Earnings Conference Call. My name is Mike 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 conference call over to Ms. Makela Taphorn with Artisan Partners. Ms. Taphorn, the floor is yours ma’am.

Hi, everyone. Before we begin, I would like to remind you that our third quarter earnings release and the related presentation materials are available on the Investor Relations section of our website. 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 and factors that may cause our actual results to differ from expectations are presented in the earnings release and 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 the remarks this afternoon include references to non-GAAP financial measures and you can find reconciliations of those measures to the most comparable GAAP measures in our earnings release. And with that, I will turn the call over to our Chief Executive Officer, Eric Colson.

Thanks, Makela. Good morning. Welcome to Artisan Partners Asset Management business update and quarterly earnings call. I am Eric Colson, CEO and I am joined today by C.J. Daley, CFO. Thank you for your time today and I hope you find this discussion useful. As with past calls, I want to reinforce who we are while reviewing the results from the current period. During this update, I want to specifically spend time talking about growth. Growth is often narrowly defined around changes in assets or cash flows. We have a broader view and I want to spend some time talking about the strategy we have in place to achieve growth over the long-term. Once I am done, C.J. will take the lead and walk you through our financials. As usual, I have a few slides at the beginning of this presentation that should look very familiar at this point. On Page 2 of the presentation, I would call your attention to two items. First, our overall AUM declined from $112 billion last quarter to a little over $106 billion at the end of the third quarter. The change reflects market depreciation and client cash outflows, which we will discuss further. The second item I would call your attention to is our headcount. I haven’t talked about this much in prior periods, but since we are talking about growth this quarter, it is relevant to discuss. At our firm, careful consideration of the function, structure, alignment, skill and development of our human capital is fundamental for growth. That means we invest in people who support our firm’s development initiatives. That may seem like a subtle or even trivial distinction to some, but for us it is important. It helps us ensure we bring on talent for the right reasons and asset…

Thanks, Eric. Good day, everyone. From a financial perspective, our 2014 third quarter was the high watermark for average assets under management and revenues. However, given the sensitivity of our business to global stock price levels, our September ending AUM was down significantly from beginning of the third quarter and global equity markets continued to decline into October. More specifically Slide 12 begins the review of our September quarter 2014 financial results. For the quarter ending AUM decreased 5% to $106.2 billion. The decline was driven – most of that decline is in global stock markets late in the quarter, but also contributing to decline were net client outflows of $645 million. Although our ending AUM is down, average AUM increased 2% quarter-over-quarter as the most significant declines in global markets occurred late in the quarter. Revenues for the September quarter were $212.4 million, up 2% of revenues in the preceding June quarter of 2014 and up 19% over corresponding September 2013 quarter. Our adjusted operating margins for the September 2014 quarter was 44.0% and in line with our expectations given the increased equity compensation and distribution expenses that we discussed during last quarter’s earnings call. Net income per share on adjusted basis was $0.79 per share, compared to $0.84 per share in the June quarter. On October 15, our Board of Directors declared a regular quarterly dividend of $0.55 per share. This is our third quarterly dividend of $0.55 in 2014 and represents the portion of our year-to-date adjusted earnings. Slide 13 is a review of our assets under management for the September quarter. And the assets under management of $106.2 billion were down 5% from $112 billion at June 30, 2014 and up 10% percent from our earning assets a year ago. Average assets for the September quarter…

Thank you, C.J. We will now open the call for questions.

Thank you, sir. We will now begin the question-and-answer session. (Operator Instructions) The first question we have comes from Michael Kim of Sandler O’Neill. Please go ahead. Michael Kim - Sandler O’Neill: Hey, guys. Good afternoon. First, I know it’s somewhat of a difficult question to answer, but just from your perspective, I would be curious to get your thoughts on where we are in terms of this cycle around institutional de-risking, rebalancing and profit taking that you alluded to earlier? And then looking ahead, any color on the pipeline or RFP activity or anything that you have picked up from a demand trend perspective?

Hey, Mike. It’s Eric. It is a difficult question on the extent of any cycle and we kind of feel the same way with regards to some of the performance trends. And so, it’s hard to predict the decision-making of committees and institutional decision-makers. We have seen some continued rebalancing and continued profit-taking in some of our strategies that have strong results. So, we know the trend isn’t 100% performance-related. We do have some strategies that do have some performance rebalancing, where we have seen assets been taken away, but overall, our interaction with our institutional clients we have deep relationships with them. And they will continue to communicate with us or gives us the heads up of how they are rebalancing and recycling. So, I can’t give you a definitive answer except for keeping a very high touch client service model with those clients to work with them. With regard – and with that same on the flipside from a growth perspective, we are good in a good sense of a healthy pipeline that’s consistent to what we have seen in past quarters. I think there has been a little bit of unpredictability around the final decision-making of when those decisions are going to fund, but from a pipeline perspective, we feel that we are in a healthy spot. And we look across our six different franchises four of them are in really good solid positions right now. The U.S. value and the emerging markets would be the two that are not as well positioned. Michael Kim - Sandler O’Neill: Okay, that’s helpful. And then I think in the past, you have mentioned total return fixed income as maybe an area of interest in terms of adding investment talent. So, I know you are focused on finding the right fit, but just given all the money and motion these days, does that maybe up the ante a bit as it relates to scouting for a team that could be in a position to generate some pretty meaningful AUM growth a bit quicker than typically is the case?

Yes. We are always open to a wide array of strategies that’s really dependent on the right talent as opposed to activities in the marketplace. And clearly, we have seen money moving around in the total return fixed income area, but that hasn’t surfaced any great talent that we are moving on and we wouldn’t move any quicker because of the assets moving around in the marketplace. I think we have – our history, we have proven to ourselves that we are not a distribution-oriented firm. We are not able to time the market as well. So, we wouldn’t move any faster or search any quicker for a total return fixed income team because of the activity in a marketplace. We will continue to wait for the right talent that fits our strategy and if it makes sense long-term we will bring that in and if can produce good solid returns, create a consistent franchise and develop the new teams as we develop past teams, I think that assets will grow in a similar fashion that we have done in the past which is a little bit slower and lumpier, but over time it’s proven the right strategy for us. Michael Kim - Sandler O’Neill: Okay, that’s helpful. And then just one last – one for C.J. and maybe just any update in terms of investors migrating to the new advisor share classes and then sort of any implications for distribution costs and margins looking out the next couple of quarters?

Yes. I think the guidance is the same. We indicated last quarter that we had this additional expense as we took on more of the share of expenses and sharing with the funds and offsetting that is sort of the migrations of this new advisor class which we still expect will happen now throughout the end of this year and into 2015. But I think you will see most of the activity on that transfer occurring mid-2015-ish. Michael Kim - Sandler O’Neill: Great, thanks for taking my questions.

Next we have Bill Katz of Citi.

Okay. Thanks very much for taking my question as well. I am not sure for maybe one of you guys, just in terms of the headcount additions Eric maybe for you since you covered in your opening remarks how – when do those 44 headcounts come on, was that a third quarter phenomenon and how quick – could you maybe expand a little more where you built out. And then how quickly might you get to some type of payback on that investment and are all those expenses sort of layered in now on a go forward basis?

Yes. Certainly Bill and I will just expand on that headcount. That addition is over the course of this year. So it’s a year-to-date where we have grown from 300 to the roughly 350. And as I mentioned it’s happened in two areas, the two teams that we have been looking at is the degrees of freedom and the logistics management and degrees to freedom are really around the credit teams. So it’s part of those new hires where the investment team itself that we have put together in Kansas City and then we have the operational support behind that, the back office for fixed income. So we had to put quite of individuals in place in our back office just to support the new credit team. And the benefit of having a credit back office now as other teams want to expand their degrees of freedom or we may find another fixed income team, we have built the operations to support additional degrees of freedom or a new team. So we think we are getting payback because one we have a new credit team and they have grown to roughly $500 million and we will get additional payback going forward. The second area that we talked about from that headcount growth is the logistics and that comes with a more global presence as well as increasing use of mobility and IT among our professionals. And so we’ve seen some growth and infrastructural support as we have globalized the business. And we think also that will pay us back as we continue to grow overseas. But we have – I can’t give you any direct return on investment by that group of individuals.

So the third quarter expense base other than the true up of equity based comp that it’s a good run rate at this point?

Well, Bill in equity based comp, the run rate is going to be about $7.7 million because we did – that grant was in July, latter part of July, so mid to latter part of July. So, we have a full quarter in December, so that number on that line will go from 6.9 to 7.7.

Okay, just a couple of follow-ups, just as I think about on Slide 5, you provided the pie chart with a little bit more definition about how you are sort of viewing the disclosure now. It sounded like you have a variety of wishes that might keep a little bit of tap on organic growth on the institutional side. So as you think about from a planning perspective as looking to ‘15 and maybe ‘16, are you anticipating that the vast majority of the growth might be coming from the retail component and if so what product areas you think really have the greatest traction at this point?

Good. I think the change in the pie chart is really just a reflection of how we are structuring our business, not a prediction on where we think assets will come from. We think the underlining decision-makers inside the institutional and the defined contribution are emerging, but clearly, the institutional consultant research process is impacting the DC business just as much as traditional institutions and how we attack that channel and position our core resources have merged. And we don’t have a separate DC effort. It’s merged into our institutional effort. And likewise on an intermediary structure that the FA, the broker dealer, how we attack trust apartments are all off of one group and we are just reflecting the way we think about resourcing these channels as opposed to where do we think growth will come from. Looking out and seeing the current trends, we highlighted that clearly the wealth channel and overseas continue to be dominant trends for us. And the institutional trend has been more rebalancing. We have had a little bit more exchange of kicks of growing assets, but then also getting money taken away from some rebalancing. We still seem to be flat in the DC area inside the institutional world as dollars continue to go to proprietary target date funds. We have seen each quarter a win or two in that open architecture of target dates, but no trend has occurred.

Got it. Okay, thanks for taking my questions.

Marc Irizarry, Goldman Sachs.

Great, thanks. Eric, can you just give us some perspective on some of the platforms, maybe how they are viewing sort of recent performance both in terms of where you are seeing some opportunities maybe to be – for gathering some assets there and then alternatively maybe where maybe there is some concern about the recent performance slippage becoming a little bit of a headwind for asset gathering on platforms? Thanks.

Sure, Marc. It’s a pretty straightforward story there on the platforms for the intermediary side. There has been a clear uptake in asset allocation towards EP-oriented strategies. So, we have seen really strong growth in our international growth strategy, especially in these platforms. Likewise, we have seen due to performance around our mid-cap value some dollars we have taken away there and that’s been really the big trends on the platforms as those two strategies. I think the rest are all within the norm with regards to those two, but they tend to be the outliers one on the upside and one on the downside.

Okay. And then just in terms of realizable capacity and some of the bigger global strategies, I mean, have you thought – rethought at all just the sort of any of the – maybe previously stated targets or opportunities there in terms of what the realizable capacity is, particularly relative to just sort of managing risk of – key man risk or just risk of sort of certain strategies becoming too important to the franchise, if you will?

We haven’t rethought capacity. And we still think from a capacity standpoint, the global equity and the global opportunities continue to be and I think will be big drivers going forward. We have seen some good wins in those strategies. We haven’t quite seen the platforms adopting a global mindset yet in their management structure or asset allocation. I think we will see some global BD firms get to the integration of the global equity or global opportunities into the platform, but we haven’t revisited the capacity or any issues around key man.

Okay. And then C.J., any help on just sort of the outlook for the fee rate, how we should think about the progression there just given how the business is trending between separate accounts and strategies and funds? Thanks.

We saw just a very slight dip this quarter in the average fee rate from 77 to 76 and it really was basically rounding a small number of our accounts billed at the end of the quarter and obviously there was a big dip in AUM at the end of the quarter which was a negative detriment to that. The majority of our assets bill over on some sort of average over a quarter. So we see it relatively stable in the 76, 77 but it really just straddling rounding there.

Great. Thanks.

Next we have Robert Lee of KBW.

This is actually Andrew Donnantuono filling in for Rob. Thank you for taking our question. I guess one question we had related to kind of growth in client cash flows outside the US. I know, last quarter, you specifically mentioned demand for global opportunities in Australia, and some other mandates that were generating interest. I was wondering if you could just provide us with kind of an update and possibly pair regional interest with specific products that you offer and kind of where you’re seeing the most demand.

Sure, Andrew. This is Eric. The – outside the United States we’ve definitely seen the most interest in the two open global strategies, the global opportunities and global equity. Both those strategies have been well positioned with the institutional consultants. So, we’re seeing institutional demand outside the US. We haven’t – we can’t narrow any specific regional this quarter versus last quarter. In last quarter we did highlight the wins in Australia, we continue to see good demands in Europe, Australia and discussions in the Middle East has been the primary areas that we’ve been in. We haven’t spent an enormous amount in Asia, but we do get inquiries, so we wouldn’t be surprised if something did surface from Asia but right now we have no specific region we can point to.

Okay, great. And then just shifting gears, just a quick question on your dividend policy, I was curious, I guess maybe less so around kind of your expectation to pay out about 100% of earnings, but more specifically the growth of the regular dividend. I know you increased it last year about $0.12 per share. I was just wondering, on an annual basis, how committed you are to growing the regular dividend and paying out the difference in the true up, or would you consider maintaining a dividend maybe a bit closer to its current rate of $0.55 and possibly paying out a bigger true up? I just wanted to get a sense of your thought on just the dividend process as a whole.

Sure. We tend to think more of the dividend on an annual basis versus quarter versus special. So, when we get to the end of this year, we’ll look at where our quarterly rate is in connection with sort of our annual earnings and we’ll adjust it accordingly. It certainly would be nice to adjust it up every year but I don’t think that that’s a driving factor in our decision-making, decision-making really is around making sure that we distribute the majority of that to our stakeholders and whether it comes in the quarterly or the special, it doesn’t factor in. Other than that we know that a lot of people give more weight to the quarterly, so we will weigh keeping it stable or increasing that little bit more than holding to it and waiting for the end of the year.

Okay, great. Thanks C.J. Thanks Eric.

Thanks Andrew.

The next question we have comes from Michael Carrier with Bank of America/Merrill Lynch. Michael Carrier - Bank of America/Merrill Lynch: Thanks guys. Eric, maybe just first question on performance. When you look at the one and three-year in some of the products that are lagging, when you think about the environment, those funds typically perform better, and so whether it’s cash levels, whether it’s the market backdrop, different themes that they are investing in. I just want to get some sense on what’s the outlook or what environment would we start to see some improvement there?

It’s hard to pick an environment that – all the strategies will improve in the units and when you look at the real short terms, say one year we have clearly seen price momentum, relative strength be a factor that has dominated our performance results, especially when you look down at global small cap, international small cap, small cap growth, small cap value that down the market capitalization and the impact that price momentum has been a determent to all those strategies. And all of our strategies have some form of valuation process in them. The strategies that have a little bit more of a growth tilt, you can see like the international small cap or the small cap growth strategy maybe wasn’t impacted as much as small cap value. So that – in the real short-term maybe a – not as an extreme factor dominating will help out, I mean none of our strategies are built around a single factor. We don’t seek strategies that are at the extreme, so we don’t look for a real deep value or statistical value oriented team. And likewise, we don’t look for a team that just really the investment process is dominated off of performance and earnings momentum. So we avoid those extreme periods, it’s not to say that our teams won’t benefit at times from those, it’s not something that we have designed. So when we have such a narrow market in a short time period so it’s not – it’s not unexpected to have this result. We have seen a team or two not perform as well and we clearly see that with the emerging markets and the U.S. value team right now. The other 4 teams are very well positioned in our mind. And when you look at their…

I mean I think you have seen our margin increased from 18 months ago, at IPO, it’s around 41% and growth of 46.5% last quarter and that was due to revenue growth based on AUM growth. I think we have always said mid-40s is where over time it would settle out, I think we got there quicker than we are. So I think we are in a good spot. I think if you see a short-term spike in AUM levels and then revenue levels, you are going to see our margin spike a bit, but we have said we always thought that the mid-40s would be a good level for us over time. So I don’t see on the horizon any sort of material changes within our control other than what the markets are going to do to us and the resulting margin. Michael Carrier - Bank of America/Merrill Lynch: Okay. Thanks a lot.

Next we have Surinder Thind of Jefferies.

Hi, good morning guys. I just kind of wanted to touch based on the decision making process and it seems it’s pretty clear that decisions are designed to promote success over the long-term or the business cycle, but how do you guys think about maybe some of the shorter term dynamics, like for example some of the consultants might be focused more let’s say on the 3-year numbers or you mentioned that there is some redemptions related to performance, which are clearly driven by more near-term considerations it seems like? So, how does something like that factor into your decision-making in current conversations with clients?

For us, I mean, it’s a good question around as decision-making takes shorter term factors into play, how do we react to that? And we have always reacted to that by having a dedicated client service team that are committed to each investment team, so that they know the philosophy and the process. We spend the majority of our time trying to educate our clients and consultants on our process and how that will behave over the long-term so that we can extend the duration of that asset. If we can extend the duration of that asset with our current fee rate, then we get a higher present value for that stream. So, as people get input that starts creating shorter term decision-making, we try to counter that with increasing our client service with providing inputs and knowledge of how to think of our strategies. And the way we have designed our distribution model is really geared on extending the duration. So, that has been our counterbalance historically and it continues to be our strategy to mitigate short-term thinking.

That’s helpful. And then maybe just a quick follow-up, given kind of the choppy start to the markets in October, any color on some of the more near-term trends and stuff or maybe some reactions from clients?

We haven’t experienced any direct reaction from the start of October here.

Okay, thank you guys.

Next we have Chris Shutler of William Blair.

Hey, guys. Good morning. On the – C.J. on a couple of expense questions, on the G&A line and communications line, is Q3 a good jumping off point or could some of those expenses come down over the next year?

So, I think communications and technology around IT is sort of in the ballpark. I think you could see it decline a bit maybe go up 100,000 or so, but I wouldn’t expect it to fluctuate dramatically around that 5.7 number. And then G&A, there is clearly some FX charges in there based on the dollar strengthening. So, I would expect G&A to sort of migrate that down to previous levels of last quarter is my best guess.

Okay, that’s helpful. And then on the distribution and marketing line, should we think about that line coming back down to kind of second quarter levels in the fourth quarter?

No, no, no, that is going to take longer to migrate. Obviously, first and foremost, it’s going to fluctuate based on our revenue levels, because that’s mostly a variable line, but in there is a $1.2 million of sort of additional expense this quarter that you should expect to see for the next I would say 4 to 6 quarters as intermediaries migrate to that advisor class that we have setup.

It makes sense. And then just lastly, you said that you are well-positioned now, particularly with some of the hires you have made around this whole Degrees of Freedom idea. For additional strategies, additional teams, I just wanted to take your temperature on how conversations with prospective teams are going? And then secondly just how many new strategies you think could be rolled out in the next, let’s say, 12 months? Thanks.

Yes, sure, Chris. We have got a pretty active year with regards to meetings with various teams and talent in the marketplace. So, the activity has been strong. The extent of those meetings and how those transpire over time is highly unpredictable. It takes a while just to get that fit and feel that whoever the team we are meeting with understands our model and we understand them. So, it’s the hard thing to predict whether someone is going to come in or not. We are constantly exploring ways that either new team or existing teams could take advantage of Degrees of Freedom and that would fit into long-term asset allocation and that it’s been a very interesting discussion with clients and consultants around the evolution of asset allocation from more of the traditional asset allocation to a risk-based or an outcome driven and there is various types of strategies that fit quite nicely into those asset allocation models. So, we are quite optimistic on where we are positioned for new strategies and teams, but I can’t predict in the next 12 months where we could be with strategies.

Okay, thanks a lot, Eric.

Well, at this time, we have no further questions. We will go ahead and conclude our question-and-answer session. I would now like to turn the conference back over to the management team for any closing remarks. Gentlemen?

No closing remarks, but we want to thank everybody for their time today and we look forward to next quarter. Thank you.

We thank you sir to the rest of the team for your time today also. The conference call is now concluded. At this time, you may disconnect your lines. Thank you and have a great day everyone.