U.S. Value wind-down, Grandview's Fund IV: Artisan Partners rebuilds its platform in real time
Record $183B AUM masks a strategic pivot — out of a 30-year equity franchise, into credit, alts and private real estate.
APAM · Earnings Call · 2026-07-29
A 30-year franchise winds down
Artisan Partners reported record quarter-end AUM of $183B for Q2 2026 (up 6% QoQ and 5% YoY) — yet the quarter's defining event is what shrank. The firm announced the wind-down of its U.S. value franchise, a team that has been part of Artisan for nearly 30 years. Net client outflows totaled $10.5B, and roughly 90% of that — $9.2B — came from the U.S. Value and Growth teams, with $6.4B attributable to U.S. Value alone.
Following the loss of 2 large sub-advisory mandates in the U.S. Value business, we concluded the prudent decision was to wind down the U.S. Value team and redeploy resources toward areas where we see substantially greater long-term opportunity.
This U.S. value wind-down is new and company-unique — it does not appear in prior quarters' keyword trajectories, and the forward earnings impact is modest. CFO Charles Daley quantified it: “the September quarter will be negatively impacted by approximately $0.03 per share compared to the second quarter as a result of the wind-down of the U.S. Value team.” — Charles Daley · 2026-07-29
The wind-down had an odd silver lining: it lifted the weighted-average fee rate to 68 basis points because the low-fee U.S. Value mandates rolled off.
The reinvestment story: credit, alts and Grandview
The capital and client focus is being redeployed into three growth engines. Credit strategies generated nearly $700M of net inflows — a 16th consecutive quarter of positive organic growth at a 15% annualized rate. Alternatives took in roughly $300M, a 25% annualized organic growth rate. In credit, Artisan continues to scale the floating-rate platform: “we did actually win an institutional mandate for our floating rate strategy inside of the credit team, $150-ish million mandate.” — Jason Gottlieb · 2026-07-29
The EMsights Capital Group strategy is the flagship of the diversified investment platform: “This quarter marks the 4-year anniversary of EMsights Capital Group... In 4 years, the team has built a distinctive business spanning 3 investment strategies.” — Jason Gottlieb · 2026-07-29 The team now manages more than $5B of assets.
Then there's Grandview Property Partners, the private-real-estate acquisition. The new flagship Fund IV is the near-term catalyst: “Fund IV, their flagship fund, we expect will be launched sometime later this summer, but likely early in the fall of this year.” — Jason Gottlieb · 2026-07-29 To gauge the step-up, the prior quarter's reminder that Fund III was just “about $150 million in raised out and committed assets” — Jason Gottlieb, CEO · 2026-02-04 — Fund IV is expected to be "multiples of that."
The strategic thread was telegraphed earlier this year, when the focus on “expanding our credit business and expanding our alternatives platform” — Jason A. Gottlieb, CEO · 2026-04-29 was flagged as the two areas of focus. What's new this quarter is the explicit admission that the equity core itself is being cut.
Resilient economics
Despite the AUM contraction from the wind-down, the economics held. Adjusted operating income rose 8% sequentially to $101.4M, adjusted operating margin expanded 180bp to 32.9%, and adjusted EPS rose to $0.94. Year-to-date revenue is up 9% on 9% higher average AUM — a reminder of the firm's inherent operating leverage.
Operating margin sits at 31.1% on the latest filed quarter — well off the 46.2% peak of 2021Q3 but structurally healthier than the sub-30% levels that preceded the pivot. The U.S. Value wind-down, which removes low-fee mandates, actually supports margin quality even as AUM shrinks.
The price tape has voted in favor of the shift: APAM is up 14.8% over the last 90 days in a clean single-segment up-trend, a notable contrast to its multi-year -41% drawdown from the 2014 peak. The market is rewarding the margin-plus-growth mix — credit, alts and private real estate — even as the legacy equity book shrinks.