Artisan Partners Asset Management, Inc. (APAM, Financial), an investment manager, was formed in 1994 with a “lift out” strategy to attract top investing talent. While the corporate office focuses primarily on the distribution of a variety of the investment products, the investment professionals operate independently and autonomously. This relatively unique format has resulted in strong long-term performing products and a successful sales effort as the firm has grown to approximately $100 billion in client assets. Recent underperformance of key products, however, has led the stock to sell at what we feel are attractive prices given its long-term investment returns and its distribution force. Additionally, the company has been adding new teams in credit and developing world strategies, which is penalizing near-term profitability. However, we believe these strategies have the ability to add sizable revenue streams while also diversifying the business. (Michael Baron)
From Ron Baron (Trades, Portfolio)'s Growth Fund fourth quarter shareholder letter.
