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DATE
Tuesday, July 29, 2025 at 12:00 a.m. ET
CALL PARTICIPANTS
Executive Chairman — Eric Richard Colson
Chief Executive Officer — Jason Michael Gottlieb
Chief Financial Officer — C.J. Daley
General Counsel — Brennan Hughes
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TAKEAWAYS
Assets Under Management (AUM): $176 billion at quarter-end, up 8% compared to March quarter-end, while average AUM was flat sequentially and up 5% from June 2024.
Net Client Cash Flows: Net outflows of $1.9 billion driven by lower gross equity flows, partially offset by a twelfth consecutive quarter of positive fixed income flows.
Revenues: Revenues were up 2% compared to March and up 4% from the prior year's second quarter; Year-to-date revenues rose 5% on higher average AUM.
Adjusted Operating Expenses: Adjusted operating expenses were up 5% from the same quarter last year, attributed mainly to higher incentive compensation and a $1.2 million charge linked to the China Post Venture Strategy closure.
Adjusted Operating Income: Slight growth versus the prior quarter and up 3% compared to the same quarter last year.
Adjusted Net Income Per Adjusted Share: Average AUM was flat sequentially, with a slight increase compared to Q2 2024.
Weighted Average Recurring Fee Rate: 68 basis points, slightly above the prior period.
Dividend: Declared quarterly dividend of 73¢ per share, a 7% increase over the prior quarter.
Seed Capital: Approximately $140 million invested as of quarter-end, with future redeployment or redemption opportunities anticipated over the next twelve to eighteen months.
Credit Franchise: Credit strategies manage more than $13 billion as of quarter-end, with two new institutional mandates onboarding and business development prioritization for credit and floating rate strategies.
Strategy Milestones and Performance: Developing World Strategy achieved a ten-year track record with an 11.59% annualized return since inception in 2015 and 678 basis points of index outperformance since inception in 2015, after fees; International Value Fund compounded nearly 11% annually over twenty-three years, ranking first in its Lipper category among 22 funds since inception.
Emerging Markets Net Flows: All five emerging market strategies posted positive net flows year-to-date, totaling $700 million in net inflows across the group year-to-date.
Alternatives and M&A Focus: CEO Gottlieb stated, "M&A is a potent opportunity for us in the future. Specifically in the alternative asset classes." with interest in value-add/opportunistic real estate, private equity secondaries, and asset-based lending segments.
Expense Guidance: No planned operating expense ramping for growth initiatives; fixed expenses are expected in the mid-single-digit range, variable expenses fluctuate with revenue.
SUMMARY
The call detailed senior leadership transition, confirmed ongoing methodical platform evolution, and highlighted continued strategic focus on talent-driven growth segments across alternative and emerging market strategies. Capital allocation updates emphasized readiness for both new initiatives and potential M&A opportunities in alternative asset classes. The company anticipates a revenue benefit in Q3 2025 from higher AUM and lower operating expenses following the China Post Venture team wind-down.
Eric Richard Colson noted intermediated wealth clients now represent over half of AUM, reflecting a major shift in distribution channels.
Institutional demand for emerging markets and credit strategies is rising, with CEO Gottlieb saying, "We are currently onboarding two more institutional mandates for the team."
International Explorer Fund delivered 14.47% annual returns, net of fees, since inception, outperforming its index by 465 basis points annually since inception and ranking twelfth out of 135 in its Lipper category since inception.
Recent recognition included Morningstar’s 2025 Investment Excellence Award for Outstanding Fixed Income Portfolio Manager awarded to credit team leader Brian Krug.
C.J. Daley reported, our $100 million revolving credit facility remains unused. underscoring ample balance sheet flexibility.
INDUSTRY GLOSSARY
Lipper Category: A classification system of mutual funds based on investment style and strategy, maintained by Lipper Analytical Services.
Drawdown Fund: A private fund structure where investor commitments are called over time to deploy capital opportunistically.
Value-Add/Opportunistic Real Estate: Real estate investment strategies targeting properties with potential to significantly increase value through management or redevelopment, usually involving higher risk and return profiles than core real estate investments.
Asset-Based Lending: Lending secured by collateral, typically involving direct loans to companies collateralized by business assets rather than cash flows.
Full Conference Call Transcript
Brennan Hughes: And we assume no obligation to update or revise any of these statements following the presentation. In addition, some of our remarks today will include references to non-GAAP financial measures. You can find reconciliations of these measures to the most comparable GAAP measures in the earnings release and the supplemental materials, which can be found on our Investor Relations website. Also, please note that nothing on this call constitutes an offer or solicitation to purchase or sell an interest in any Artisan investment product or a recommendation for any investment service. I will now turn it over to Eric.
Eric Colson: Thank you, Brennan, and thank you all for joining the call or reading the transcript. In June, Jason succeeded me as CEO, and I assumed the role of his executive chair. This will be my last quarterly call, my fiftieth since our IPO in 2013. On each of the 50 calls, I have started with the same slide level setting who we are as a firm. Artisan Partners has been, is, and I believe always will be a high value-added investment firm designed for talent to thrive in a thoughtful growth environment. Since our founding thirty years ago, we have demonstrated the repeatability of our model across investment leaders, generations, geographies, asset classes, and distribution channels.
We have grown the firm thoughtfully, methodically, expanding in the direction of high value-added investing. Throughout, we have maintained and enhanced our investment-first culture, staying focused on investments and client outcomes. We take tremendous pride in the consistency of our approach and the consistency of our results. After Jason speaks, I'll say a few words about how we have evolved as an investment firm and how we are positioned for the future.
Jason Gottlieb: Thank you, Eric. First of all, on behalf of everyone at Artisan, thank you for your twenty years of service to the firm, the last fifteen as CEO. During Eric's tenure as CEO, the firm has grown to 11 investment teams and 26 strategies across equities, fixed income, and alternatives. We have established Artisan as a multi-asset investment platform. We have reoriented our distribution to better access and serve the intermediate wealth channel, and we have stayed true to who we are. Maintained our investments-first culture, enhanced Artisan as a home for talent, compounded capital for clients, and generated healthy returns for shareholders. For me individually, it has been a great privilege to work alongside Eric.
I'm honored to serve as the third CEO in Artisan Partners' thirty-year history, and I look forward to continuing to work closely with Eric in his role as executive chairman. As I think everyone knows, Eric plans to remain very active in the firm's governance, strategy, and future. We have been very methodical in executing on this transition and will continue to be a source of consistency and stability for investment talent and clients. In 2013, Artisan identified Brian Krug and recruited him to join the firm and start the Artisan Partners credit team.
The firm's decision to enter fixed income with Brian and the development of the credit franchise over the last twelve years was further validated earlier this month when Brian won Morningstar's 2025 Investment Excellence Award for Outstanding Fixed Income Portfolio Manager. The award covers the entire fixed income universe, not just high yield. The list of past winners includes multiple fixed income luminaries. Brian has proven himself as one of the very, very best. Over the past eleven years, the credit team's flagship high-income strategy has outperformed its benchmark by 170 basis points annually after fees. Since inception, the high-income strategy is ranked number two out of 154 products in its eVestment universe.
In 2017, the credit team launched the credit opportunity strategy, which has generated 10.23% annual returns net of fees since inception. In 2022, the team launched the floating rate strategy, which has generated 6.68% annual returns net of fees since inception. And in 2024, the credit team closed Artisan's first drawdown fund, the Artisan Dislocation Opportunity Strategy, with $130 million of commitments for the team to opportunistically invest in dislocation events. Today, the credit team manages more than $13 billion across the franchise. We are currently onboarding two more institutional mandates for the team. Continue to prioritize business development for credit opportunities and floating rate strategies.
And we are actively exploring ways to further expand the credit team's degrees of freedom and business. Congratulations to Brian and the team on the most recent recognition, your investment track record, and the franchise you have built. In addition to Brian and the credit team, Morningstar also recognized David Samra as one of three finalists for the 2025 US Morningstar Award for Investing Excellence Outstanding Equity Portfolio Manager. Along with Dan O'Keefe, David previously won Morningstar's International Stock Fund Manager of the Year Award in 2008 and 2013, an award they were nominated for five times between 2011 and 2016.
David's flagship international value strategy has compounded capital at nearly 11% annually for twenty-three years, generating 418 basis points of annual average annual outperformance since inception and after fees. Over that period, the Artisan International Value Fund ranks number one in its Lipper category among 22 funds. Almost five years ago, David expanded his team with the addition of Bani Zhao and Anand Vasegiri. 14.47% annually since inception, outperforming its index by 465 basis points annually on average since inception and after fees. Since inception, the International Explorer Fund ranks twelfth out of 135 funds in its Lipper category, with approximately $800 million in the International Explorer Strategy.
As we have previously discussed, earlier this year, we launched the Global Special Situation Strategy inside the International Value Group. Global Special Situations is the International Value Group's first fixed income strategy and is off to a strong start. Congratulations to David Samra and the International Value Group on the recent recognition from Morningstar, the performance and the growth of the International Explorer, and the launch of Global Special Situations. Moving to slide five, on July 1, the Developing World Strategy became our twelfth strategy with a ten-year track record. Since inception in 2015, Lewis Kaufman and his team have compounded capital at an average annual rate of 11.59%, beating the index by 678 basis points after fees.
Since inception, the Artisan Developing World Fund ranks third out of 434 funds in its Lipper category. This is truly an exceptional outcome, which we believe will drive additional business expansion for Developing World. That expansion should be aided by the growing interest and demand we are seeing across our emerging market strategies. Across equities, fixed income, and alternatives, each of Artisan's five emerging market strategies has positive year-to-date net flows. In aggregate, we have raised a net $700 million across the group so far this year.
In addition to Developing World's performance and ten-year milestone, the Sustainable Emerging Markets strategy has outperformed the index by more than 100 basis points annually over each of the trailing one, three, five, and ten-year periods, after fees. In each of the M Sites Capital Group's three strategies, has or will soon surpass its three-year anniversary. All with strong performance, anchor capital, and business momentum. Industry dynamics and leadership transitions that other managers are contributing to money in motion, and a promising setup for us with strong teams and track records across all five emerging market strategies. More generally, the information on this slide is a further testament to the Artisan Partners model and its repeatability through time.
Not only have we developed and expanded the investment platform, we have extended the duration of our existing strategies and franchises, compounded capital for clients, and generated positive outcomes for multiple generations of talent, as well as for our shareholders.
Eric Colson: Thank you, Jason. Our ability to evolve around a core set of principles has been key to the repeatability of our success. We have remained true to who we are as a high value-added investment firm, designed for talent to thrive in a thoughtful growth environment. At the same time, we have evolved. We have methodically expanded degrees of freedom inside of existing strategies and with new strategies. We have gone from public equities to fixed income to alternatives to multi-asset class. Broadening the opportunity set for our investment teams has enhanced their ability to differentiate and outperform. We have built out the platform that talented investors can plug into at Artisan.
When we started, talent wanted to be left alone in an office with a Bloomberg. In today's environment, talent wants and needs a lot more. Access to markets, instruments, and information. Technology and data, and advice, guidance, support to build a sustainable investment franchise. Lastly, we have evolved our distribution to align with clients who value what we offer and what we do. Clients with long-term asset allocation for high value-added investing, clients with duration that gives managers the time needed to pursue alpha, clients who do the hard work and research upfront to identify and partner with managers who will deliver over long periods.
Increasingly, this has taken us into the direction of intermediated wealth clients, which today represents over half of our AUM. We are a very different firm than we were fifteen years ago, let alone thirty years ago. But at our core, we haven't changed. We are a high value-added investment firm driven by talent. We have simply evolved where and how we apply our principles so that we remain relevant to investment talent and sophisticated asset allocators. These evolutions have taken us in the direction of an investment platform that fully resources talent, multi-asset, and alternative investments. And increasing focus on the opportunities in the intermediate wealth. I'm extremely proud of the evolution we have made.
I expect it to continue under Jason's leadership, and I am confident we will continue to do well for investment talent, clients, and shareholders. I will now turn it over to C.J. to discuss our recent financial results.
C.J. Daley: Thanks, Eric. An overview of financial results begins on slide seven. Second quarter results reflect strong equity market returns across global markets, which drove our ending AUM to $176 billion, up 8% compared to March. Our business model continues to deliver durable growth and attractive long-term returns for clients and shareholders. While ending AUM was up sharply, average AUM for the quarter was flat sequentially and up 5% compared to the June 2024 quarter. Year-to-date average AUM improved 7% over the prior year's six-month period. Net client cash outflows during June were $1.9 billion driven by a lower volume of gross equity inflows and outflows as compared to the prior quarter.
Equity outflows were partially offset by continued positive fixed income flows. The second quarter represents the twelfth consecutive quarter of positive flows for our fixed income business. Year-to-date, net client cash outflows increased over the prior year primarily due to a previously disclosed $1.2 billion outflow from a separate account rebalancing in the first quarter. Our complete GAAP and adjusted results are presented in our earnings release. Revenues for the quarter were up 2% compared to March and up 4% compared to the prior year's second quarter. Our weighted average recurring fee rate for the quarter was 68 basis points, up slightly from the prior quarter.
Adjusted operating expenses for the quarter were up 3% from 2025 and 5% from the same quarter last year, primarily from higher incentive compensation expense due to increased revenues and market appreciation of long-term incentive awards. Additionally, second quarter 2025 reflects a $1.2 million charge in connection with the closure of the China Post Venture Strategy. Adjusted operating income increased slightly compared to the prior quarter and 3% compared to the same quarter last year as a result of higher revenue. Adjusted net income per adjusted share was flat compared to last quarter and up slightly compared to 2024 consistent with operating income. Year-to-date 2025 revenues were up 5% compared to 2024 on higher average AUM.
Year-to-date adjusted operating expenses increased 4% from 2024 primarily from higher incentive compensation on elevated revenues and the impact of the addition of the January 2025 long-term incentive award grants. In calculating our non-GAAP measures, non-operating income includes only interest expense and interest income. Although valuation changes on our seed investments impact shareholder economics, we fully exclude these valuation changes from our adjusted results to provide transparency into our core business operations. Looking forward to Q3, revenue should benefit from 8% higher AUM.
In addition, the September will benefit from the absence of approximately $2.4 million of costs associated with the China Post Venture team, including the $1.2 million one-time charge related to the closure of the China Post Venture strategy. Turning to slide 11, our balance sheet remains strong. We currently have approximately $140 million of seed capital invested in seeded products. As strategies reach scale, our seed investments are redeemed, any redemption amounts realized are included in the cash available for corporate purposes, new seed investments, or as an addition to our year-end special dividend. In addition, our $100 million revolving credit facility remains unused. In August, $60 million of our senior notes will mature. 2025.
We will use the proceeds from the new debt along with cash on hand to retire the $60 million of debt maturing in August 2025. We continue to return capital to shareholders on a consistent and predictable basis, through quarterly cash dividend payments and a year-end special dividend. Consistent with our dividend policy, our board of directors declared a quarterly dividend of 73¢ per share with respect to the June 2025 quarter, a 7% increase over the prior quarter. That concludes my prepared remarks, and I will turn the call back to the operator.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star then 2. Please limit your questions to 2 in order to allow time for other questions. At this time, we will pause momentarily to assemble our roster.
Alex Blostein: The first question comes from Alex Blostein with Goldman Sachs. Please go ahead.
Anthony: Hey. Good afternoon, guys. This is Anthony on for Alex. Maybe just to start on capital allocation and more specifically around M&A. I guess I have expressed interest in M&A specifically around building out your alt capabilities. So what areas are asset classes are you most open to pursue, and how should we think about the pipe of deals today?
Jason Gottlieb: Hi. It's, it's Jason. Thanks for the question. We have spent some time talking about M&A. I guess, I'd just take it back to the first principles. Number one, it's always to be a talent-driven opportunity that's gonna guide where we're gonna where we're gonna go. There's an absolute standard. We're not gonna change that standard, whether it's lift out or M&A. But as you rightly pointed out, we do think M&A is a potent opportunity for us in the future. Specifically in the alternative asset classes. You know, there's a there's a range of areas that we focus on. And, you know, we're not we're not trying to be, pigeonholing ourselves in any one specific area.
But as you've heard us talk about real estate is interesting because it's highly fragmented. There's multiple ways to win. There's a lot of talent out there. There's a lot of disruption going on and certainly, idiosyncratically, at various firms, there's opportunity to dislodge talent. You know, we will focus on the let's call it, the areas where we think value can be driven. So we're not looking to do anything in the core or core plus from a lift out or M&A perspective. We would really focus on value add, into the opportunistic categories where return differential is a lot higher and we where we think our platform can be benefit to talent.
You know, we've looked at private equity, more specifically, the secondaries business is interesting for us. It's an area where we think risk can be taken, risk can be rewarded. The duration and time to get your DPI is a lot a lot shorter than what you typically see in your traditional buyout or venture funds. We think it plays well into the intermediate wealth space. And there again, there's a lot of talent out there in both LiftOut and M&A. You know, we talked about private credit. We don't we don't love doing something that's just a me too in the in the in the bulge bracket sponsor driven area.
We don't think we have the ability to compete there, but there are other areas where there's a vast TAM, big opportunity set, and high differentiation in areas like asset-backed asset-based lending. And so that's just a flavor, but again, I don't wanna say that's where we're screening or looking for opportunities. That's where opportunities are finding us, and they seem really, really interesting and compelling. But we'll we'll let the talent drive us and guide us in that regard. The last point I would make is, you know, we're we're continuing to see a high volume of active of activity.
And given the build out of our investment strategy group over the last several years, it's allowed us the opportunity to really, you know, kind of focus on the external effort a little bit more than we have been in the past.
Anthony: Great. Yeah. That's helpful. And then maybe for my follow-up just on capacity constraints. I know this has been a headwind, in a couple strategies for a little while. So how should we think about, you know, the timing of these kind of reopening and the acceleration so the gross rope. Profile.
Eric Colson: Anthony, it's Eric. Yeah. We are always managing capacity as you've highlighted. As we've always said, investment is the first thing we think about, and then we think about the distribution side. We'll always protect the investment results. So you know, there's a few strategies on the growth side, that we're freeing up a little bit of capacity and managing that given some of the trends we've seen in flows and a lot of the rebalancing we saw this last quarter. Was in the growth side of the equation. With regards to the international value and the high-income strategy. Really, we're working with a very strong embedded client base. Much of that client base is the intermediated wealth client.
Intermediated club client puts us in a model and that model is refreshed for existing and new clients, and many of these intermediate wealth firms wanna have consistency. So we really tried to work with those groups on capacity and the large existing clients. And we'll continue to manage that and be judicious about that. Our or really how we how are we looking at the constrained strategies right now.
Anthony: Thanks. That's helpful.
John Dunn: The next question comes from John Dunn with Evercore ISI. Please go ahead.
John Dunn: Hey. Thank you. Yeah. You mentioned two institutional mandates. Maybe if you could talk a little more about them, maybe the timing of when they might fund and also, more generally, just the temperature of the conversations. You're having with institutional clients both in The US and then overseas.
Eric Colson: Yeah. John, this is Eric. Yeah. The institutional clients, you know, we did see some movement around rebalancing a little bit on the global equity side. On the positive front, we see quite a bit of interest in emerging markets at large. We had a nice uptick in our emerging markets local opportunities. With the Emsights team. We also have some good opportunity to get funded with the, sustainable emerging markets. And we're also hitting the ten-year anniversary that we've highlighted on the call with Developing World. So there's definitely a positive story around the fixed income strategies that we have as well as the emerging markets.
You know, with regards to the institutional specifically, I think many of them are dealing with illiquid allocations and know, many of the private equity and other illiquid in real estate are creating evergreen funds and are really looking to extend the duration of those assets. Know, some clients are really focused on that. And then the secondly, with the institutional clients, we've you know, just seen a little bit of, backing off on risk given the market environment. And I think that's why I've been leaning more towards credit. But that back off of an analysis around risk given the market environment, the tariffs, We saw really a muted gross flow this quarter.
And if you looked at the gross levels, it was down quite a bit from previous quarters. And that signaled, I think, just a more cautious risk aware environment. And we're looking at credit as an area of growth. Equity had some rebalancing, and many people starting to revisit emerging markets as place to allocate dollars.
John Dunn: Gotcha. And then, maybe you know, just to frame it, again, geographically in terms of distribution, any areas where you're you expect to see you know, flow inflow demand or money at risk over the next know, the '25?
Eric Colson: From a geographical, I you know, I don't think we've seen any specific spots geographically in The US has been the one area with regards to public equities on the institutional side that we've seen the rebalancing. But I not nothing's jumping out from a geographical standpoint. That's causing us concerns.
John Dunn: Great. Thank you very much.
Bill Katz: The next question comes from Bill Katz with TD Cowen. Please go ahead.
Bill Katz: Okay. Thank you. So just staying on the flow discussion for a moment. I apologize. I joined just as your comments were going on. Did you frame or size the institutional wins I'm so curious. You mentioned that you're seeing a pickup in EM at sounds like it might be coming from other equities. A, is that correct? And then b, if that does sustain itself, how do you sort of see the net impact flowing through to APEM given your you know, you're skewed to some of the legacy mandates versus the more fertile opportunity in the EM business, but that being a little bit smaller.
Eric Colson: Yeah. We talked about two larger mandates. We're we're starting to see that on the EM side of the equation with M sites and sustain emerging markets. And then we also mentioned Bill on the developing world, but, we're we're seeing a growing interest and growing opportunities with Emsights, with the sustainable emerging markets, with developing world, And when we brought in the Emsights team, the first couple of years, it was the largest outflow of emerging market debt in the institutional market place and the history of that asset class and that was followed up with another down year. You're starting to see a lot of people revisit that allocation.
Given M Sites just hit a three-year number across all of its strategies, developing world to ten-year, and our sustainable emerging markets is had a very strong performance over the last one, three, five, ten of screening well. Very optimistic on allocations there. And as well as beyond the EM debt, the broader fixed income category. Is, also, up ticking for us. And how that offsets the equity side, it really depends on how our large clients on our international value, international equity, and the global products rebalance and manage their risk. So it's hard to predict. Those are lumpy episodic, rebalancing. That does occur. That's been the bulk of the outflow this quarter.
And as I said earlier, it's been a very muted gross flow across the board this quarter. So it's hard to actually frame the exchange of kicks on, the inflow outflow. Story?
Bill Katz: Well, I appreciate the perspective. And then maybe one tying in the opportunity for growth. To C.J. As you think through maybe the OpEx outlook into the second half of the year, appreciate the guidance that you won't have the elevated severance associated with the wind down of the China venture fund. How we think about maybe OpEx? And particularly, would you look to ramp any kind of spend just given that you're at sort of inflection on some of these flagship funds that could potentially scale pretty nicely?
C.J. Daley: Yeah, Bill. Yeah. There's really no sort of update from an OpEx standpoint. I mean, we're still on target to be like mid single digits on the fixed side. And, of course, on the variable side, which is, you know, almost 55% of our expense base, you know, that'll vary with, with revenues. So there is no you know, expected expense ramping for any type of growth. I think we're well positioned to take advantage of the growth that, exists within the system right now, and it's just about executing on it. And we don't really need to, to put any kind of expense initiatives in place to, to capture that.
Bill Katz: Okay. Very good. Thank you. And Eric, congratulations again. I'm feeling very nostalgic today, but thank you for all your help along the years.
Eric Colson: Thanks, Bill.
Kenneth Lee: The next question comes from Kenneth Lee with RBC Capital Markets. Please go ahead.
Kenneth Lee: Hey, good afternoon, and thanks for taking my question. During the prepared remarks, you mentioned potentially expanding some of the degrees of freedom with on the credit side. If you could just further flesh out or outline what's in the pipeline for new products within the credit side over the near term? Thanks.
Jason Gottlieb: Yeah. Hey, Ken. It's Jason. We are evaluating various structures and opportunities as it relates to the private markets. There could be the potential for you know, interesting ways to access the private markets with our existing franchise the, the credit team. We're we're certainly looking at those and evaluating those. In the context of continuing to expand out those degrees of freedom and continue to grow and build what we think is a you know, a platform that has the right amount of resources and certainly, the brand recognition to have that opportunity. I'd say that's the you know, that's probably the nearest term opportunity.
And, you know, within the Emsights business, you know, we're continuing to evaluate whether there are opportunities to launch a private fund around our, our global, unconstrained strategy more from an institutional perspective that, you know, they might not, know, be interested in accessing a mutual fund. And so those are probably the two. One's a little bit more of an expansion of degrees of freedom, and one's just an opportunity to capitalize on the existing toolkit.
Kenneth Lee: Great. Very helpful there. And just one, follow-up, if I may. Any updated outlook around seed capital needs for this year? And relatedly, any early indications around payout ratio for this year? Thanks.
C.J. Daley: Yeah, I'll take that one, Ken. In seed capital, think right now we're well positioned. We always you know, are thinking about new products. But, know, as we as we sit here today, there's nothing you know, no planned new seeds, although, you know, summer some are in the works. I'd say, you know, we're in a well positioned, spot from a capital perspective as we've ever been. As you know, we've had a lot of seed capital that we expended, over the last several years, and our book is now a $140 million. You know, we are seeing some expect to see some opportunities over the next twelve to eighteen months to start to pull some of that back.
Redeploy that either for additional seed or, you know, acquisitions if something like that comes to fruition. So I feel like we're, you know, really well positioned from a seed perspective, and, obviously, know, we're not a fan of debt, but, if you think about M&A and context of buying you know, you know, an established firm. Know, we do have capacity within our line of credit. And additional debt capacity. Obviously, not our preference. But just to highlight, you know, we're in a good capital position to execute on what we need to, whether it be seed or M&A.
Kenneth Lee: Great. Very helpful there. Thanks again.
Operator: This concludes our question and answer session. And the Artisan Partners Asset Management business update and second quarter 2025 earnings call. Thank you. You may now disconnect.