Artisan Partners Asset Management Inc. (APAM) stock intrinsic value fair value estimate & owner earnings analysis

Artisan Partners is an active investment manager that runs a set of autonomous investment teams (Growth, Global Value, U.S. Value, Credit and others) and earns fees on client assets. It had $179.9 billion under management at the end of 2025 and revenue of $1.197 billion, of which management fees were $1.168 billion and performance fees $29 million. About 80% of revenue comes from clients domiciled in the United States. Fees run about 69 basis points on average assets, down from 70.4 in 2023. How we measure earnings. The company's reported operating cash flow is distorted by funds it consolidates: in 2025 it fell to $172 million from $373 million in 2024 only because purchases of investments inside consolidated funds absorbed cash. We removed those fund purchase, sale and working-capital lines. We then subtracted working-capital swings (mostly accrued bonuses), stock compensation, maintenance capital spending (tiny), the payments owed to pre-IPO partners under the tax receivable agreements ($38 million in 2025), and the cash distributed to partner-unit holders ($56 million), so the figure belongs to Class A shareholders. On that basis earnings per share were $3.95 in 2025, $3.73 in 2024, $3.03 in 2023, $3.25 in 2022 and a peak $5.66 in 2021. This is close to the dividends actually paid, about $257 million in 2025. Because the business is closely tied to market levels and is a small-capital, high-payout model, we use the median of 2020 to 2025, $3.72 per share, which spans the 2021 boom and the 2022-2023 drawdown. Earlier years are less comparable because far more of the partnership was held in units then. Growth. Earnings grew 5.8% in 2025. We assume no growth in the base case, below that rate. Nothing that lifts earnings is secured: 2025 net client outflows were $12.7 billion (about 8% of opening assets), including $11.0 billion out of the Growth team, whose assets fell from $38.4 billion to $31.3 billion despite market gains. Asset growth in 2025 came from market returns of $33.4 billion, which we do not treat as a driver we can count on. The offsets are real but not enough to credit growth: the Credit team took in $2.4 billion of net new money and the Global Value team's Global Value strategy manages $36.3 billion. Base case: $52.9 per share. Earnings stay at $3.72 for 15 years, then decline 3% a year, reflecting a franchise with an 18-year record that persists but is exposed to steady fee pressure and outflows from teams that lag their benchmarks. Bear case: $25.7 per share. Earnings start at the 2023 low of $3.03 and shrink 4% a year for ten years, as the Growth team's outflows spread and fees drift lower, then decline 8% a year. Debt is modest, about $200 million of fixed-rate senior notes, refinanced in 2025 at 5.43%, and does not drive the outcome. Bull case: $76.3 per share. Earnings begin at about $4.10, reflecting year-end assets 4% above the 2025 average, and grow 3% a year for ten years as Credit and Global Value inflows cover outflows elsewhere, then stay flat for ten years before declining 3% a year. What would make this wrong: a further collapse in one of the large teams (Global Value was $54.0 billion of assets in the team table, about 30% of the total), a sharp market fall that cuts fees (revenue fell 19% in 2022), or the loss of key investment professionals. We also could not reconcile the 2025 cash flow statement's XBRL tags to the printed statement for stock compensation, so we used the printed statement. Share counts are Class A shares; partner units are handled through the distribution deduction above.