Artisan Partners Asset Management Inc.’s (APAM Quick QuoteAPAM - Free Report) first-quarter 2022 adjusted net income per adjusted share was 98 cents, meeting the Zacks Consensus Estimate. The bottom line declined from $1.13 in the year-ago quarter.

While management fees earned from Separate accounts supported revenues, performance revenue declines weighed on the overall top line. Lower assets under management (AUM) and an increase in expenses were undermining factors.

Net income attributable to Artisan Partners (GAAP basis) was $65.4 million, down from $77.3 million in the prior year.

Revenues Fall, Expenses Increase

First-quarter revenues were $281.6 million, down 3% from the year-ago quarter. The fall primarily resulted from a decrease in performance fee revenues. The top line missed the Zacks Consensus Estimate of $286.7 million.

Management fees earned from the Artisan Funds & Artisan Global Funds fell 0.7% year over year to $175.5 million. Management fees earned from Separate accounts grew 1.3% to $105.9 million.

Total operating expenses amounted to $174.6 million, up 34% year over year. The rise was primarily due to higher occupancy, and general and administrative expenses.

The operating income was $107 million, down 12.2% year over year.

AUM Falls

As of Mar 31, 2022, the ending AUM was $159.6 billion, down 9% from the earlier quarter due to global market declines.

The average AUM totaled $162.2 billion, down 8% from the prior quarter.

Balance Sheet Position Deteriorates

Cash and cash equivalents were $187.5 million compared with $189.2 million as of Dec 31, 2021. The company’s debt leverage ratio, calculated in accordance with its loan agreements, was 0.3 as of Mar 31, 2022.

Capital Deployment Update

The company’s board of directors declared a variable first-quarter dividend of 76 cents per share of Class A common stock. The amount will be paid out on May 31, 2022, to shareholders of record as of the close of business on May 17.

Our View

Artisan Partners’ diverse investment products are expected to support growth. A rise in average AUM in the future will aid the top-line expansion. However, escalating costs will hinder bottom-line growth to some extent.

Currently, Artisan Partners carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Performance of Other Asset Managers

BlackRock, Inc.’s (BLK Quick QuoteBLK - Free Report) first-quarter 2022 adjusted earnings of $9.52 per share outpaced the Zacks Consensus Estimate of $8.92. The figure reflects a rise of 18.4% from the year-ago quarter.

BLK’s results benefited from an improvement in revenues, partly offset by higher expenses. Moreover, long-term net inflows supported growth in the AUM balance.

Invesco’s (IVZ Quick QuoteIVZ - Free Report) first-quarter 2022 adjusted earnings of 56 cents per share missed the Zacks Consensus Estimate of 61 cents. The bottom line declined 17.6% from the prior-year quarter.

Results were adversely impacted by a rise in operating expenses. However, improvement in revenues and solid growth in the AUM balance act as tailwinds.

SEI Investments Co.’s (SEIC Quick QuoteSEIC - Free Report) first-quarter 2022 earnings of $1.36 per share were in line with the Zacks Consensus Estimate. The bottom line reflects a 53% jump from the prior-year quarter. The reported quarter comprised a one-time early termination fee of $88 million or 47 cents per share, which was included in information processing and software servicing fees.

SEIC’s Results were aided by revenue growth and an increase in the AUM balance. These were offset by a rise in expenses.