아티산 파트너스(APAM) 2026년 3분기 실적 발표 전화회의: 106억 달러 자금 유출, 크레딧 성장

핵심 요약

• 분기 말 운용자산은 1,690억 달러로 전분기 대비 8%, 전년 동기 대비 7% 감소했으며, 고객 자금 순유출은 106억 달러에 달했습니다.
• 순유출 중 약 78억 달러는 두 가지 개별 요인에 의한 것입니다. 19억 달러는 미국 가치주 팀 정리에 따른 것이고, 59억 달러는 대형 글로벌 가치주 고객 관계의 리밸런싱에 의한 것입니다.
• 매출은 3억 1,300만 달러로 전분기 대비 1%, 전년 동기 대비 4% 증가했습니다. 조정 EPS는 1.03달러로 증가했으며, 조정 영업이익률은 전분기 대비 260bp 확장된 35.5%를 기록했습니다.
• 크레디트 및 대안투자 부문은 3분기에 11억 달러의 순유입을, 연초 대비 32억 달러의 순유입을 기록했습니다. 크레디트 부문은 17분기 연속 순유입을 기록했습니다.
• 장기 성과는 견조하게 유지되어 수수료 차감 전 기준 AUM의 92%가 10년 동안 벤치마크를 상회했고 99%가 설정 이후 벤치마크를 상회했습니다. 다만 이번 분기 단기 주식 성과는 다소 부진했습니다.
• 경영진은 4분기 경상 운용수수료율이 70bp 부근에서 시작할 것으로 예상합니다. 또한 재투자되지 않는 뮤추얼펀드 분배금으로 인해 AUM이 25억 달러 감소할 것으로 추정합니다.

핵심 재무 데이터

사업 및 영업 성과

크레디트 및 대안투자는 자체 성장의 주요 원천으로 유지되었습니다. 크레디트 전략은 약 2억 9,000만 달러의 순유입을 기록했고, 대안투자는 아티잔 글로벌 언콘스트레인드 뮤추얼펀드를 중심으로 약 7억 7,000만 달러를 유치했습니다.

크레디트 및 대안투자의 합산 AUM은 5년 동안 두 배 가까이 증가하여 260억 달러를 넘어섰으며, 회사 전체 AUM에서 차지하는 비중도 8%에서 15%로 확대되었습니다. 아티잔 크레디트 팀은 160억 달러 이상을 운용하고 있으며, 모든 크레디트 AUM은 보고된 기간 전체에 걸쳐 벤치마크를 상회했습니다.

EM사이트 캐피털 그룹(EMsights Capital Group)의 3가지 전략은 각각 수수료 차감 전 기준 설정 이후 두 자릿수의 연환산 수익률을 기록했으며, 각 벤치마크 대비 초과 수익을 달성했습니다. 아티잔은 또한 UCITS 출시를 통해 글로벌 언콘스트레인드 전략을 유럽으로 확장할 계획입니다.

회사는 영국 및 유럽 자산관리 시장에서의 접근성을 확대하기 위해 2026년 중에 13개의 신규 UCITS 셰어클래스를 출시했습니다. 규제 당국 및 이사회의 승인을 전제로, 4분기 중 아티잔 셀렉트 이쿼티 펀드 및 아티잔 포커스 펀드의 ETF 셰어클래스를 도입하고 2027년 중 추가 출시를 진행할 예정입니다. 경영진은 ETF 셰어클래스의 수수료를 수수료 경쟁에 활용하기보다는 기존 전략 수준에 맞춰 책정할 것이라고 밝혔습니다.

아티잔은 또한 자산관리 고객을 위해 공모 및 사모 크레디트 역량을 결합한 인터벌 펀드를 2027년 출시 목표로 개발 중입니다. 경영진은 주요 파트너들의 초기 피드백이 긍정적이라고 설명했으나, 해당 상품은 여전히 개발 단계에 있습니다.

경영진 전망

경영진은 두 건의 대형 환매 사건 이후 4분기가 낮은 AUM으로 시작되지만 평균 수수료율은 더 높아졌다고 밝혔습니다. C.J. 데일리 CFO는 경상 운용수수료율이 70bp 수준을 유지하며 단기적으로 비교적 안정적인 흐름을 보일 것이라고 언급했습니다.

회사는 뮤추얼펀드 투자자가 재투자하지 않은 연간 이자·배당 소득 및 자본이득 분배금으로 인해 4분기 AUM이 25억 달러 감소할 것으로 추정합니다.

전체 AUM의 약 3%가 성과보수 적용 대상이며, 이 중 대부분은 12월 31일에 확정됩니다. 경영진은 연말까지의 시장 및 투자 성과에 따라 달라질 수 있지만, 2025년 4분기에 기록된 약 2,900만 달러와 유사한 기여도를 보일 것으로 현재 전망하고 있습니다. 성과보수 계약이 체결된 8개 팀 또는 계좌 중 7개가 실적 발표 당시 성과보수 지급 조건을 충족하고 있었습니다.

고정비 전망은 경영진이 설명한 그랜드 뷰 프로퍼티 파트너스 비용과 KIX 및 장기 인센티브 부여 교환의 영향을 제외하고 한 자릿수 중반의 증가율을 유지하고 있습니다.

리스크 및 점검 사항

3분기 동안 인터내셔널 가치주 및 글로벌 가치주를 비롯한 수개의 대형 주식 전략 전반에서 단기 상대 성과가 약화되었습니다. 경영진은 10월 들어 두 전략 모두 실질적으로 개선되었으며, 수수료 차감 전 기준 10월 26일 현재 1년 기준 AUM의 75%가 벤치마크를 상회하고 3년 기준 84%가 상회하는 데 기여했다고 밝혔습니다.

기관 주식 부문은 액티브에서 패시브로의 전환, 포트폴리오 리밸런싱, 연기금 등 자금지원 플랜의 위험 축소(de-risking) 압력에 계속 직면해 있습니다. 경영진은 대형 기관 위탁 계좌의 수수료율이 낮은 경향이 있다고 언급했으나, 이러한 압력은 자금 유출입에 영향을 미칠 수 있습니다.

3분기 자금 유출 수치는 두 가지 개별 사건의 영향을 크게 받았습니다. 경영진은 주요 고객 관계가 팀, 전략, 판매 채널 전반에 걸쳐 다변화되어 있지만, 향후 환매 및 고객 리밸런싱은 AUM과 매출의 중요한 변수로 남아 있다고 설명했습니다.

성과보수, 계획된 상품 출시 및 잠재적 인수합병(M&A)은 조건부 사항으로 남아 있습니다. 성과보수는 연말까지의 성과에 따라 달라지며, ETF 출시는 규제 당국 및 이사회의 승인이 필요하고, 크레디트, 사모 크레디트, 세컨더리 및 특정 섹터 사모펀드 분야의 기회는 여전히 검토 중입니다.

애널리스트 Q&A 주요 내용

• 크레디트 확장: 경영진은 변동금리 크레디트, 크레디트 오퍼튜니티(Credit Opportunities), 공모·사모 결합 인터벌 펀드, 유럽 신디케이트론 및 채권, 그리고 CLO로의 잠재적 확장을 성장 동력으로 제시했습니다.
• 판매 파이프라인: 제안요청서(RFP) 활동은 전분기 및 전년 동기 대비 대체로 안정적인 수준이었으나, 경영진은 전체 파이프라인의 금액 규모가 의미 있게 증가했다고 밝혔습니다. 현재 기회의 상당 부분은 크레디트 및 자산관리 채널에 연계되어 있습니다.
• M&A 및 팀 영입: 아티잔은 팀 영입(lift-out)과 인수합병(M&A)을 모두 검토하고 있습니다. 경영진은 M&A 성격이 강한 두 건의 크레디트 기회와 함께 사모 크레디트, 세컨더리 및 특정 섹터 사모펀드 분야의 잠재적 거래를 언급했습니다.
• 수수료율 구성: 고수수료 주식형 뮤추얼펀드 자산 감소는 고수수료 대안투자 부문의 성장과 인터벌 펀드, 그랜드 뷰 프로퍼티 파트너스의 차기 플래그십 펀드, 존 브루드닉(John Brudnick) 팀 영입과 연계된 롱숏 전략 등 계획된 상품에 의해 상쇄되고 있습니다.
• 해외 수요: 아티잔은 영국, 유럽 및 중동 지역에 판매 리소스를 확충했습니다. 경영진은 특히 크레디트, 대안투자 및 다변화 전략을 중심으로 활동 수준이 높아졌다고 보고하는 동시에, 이러한 확장이 아직 초기 단계임을 강조했습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Welcome to the Artisan Partners Asset Management Business Update and Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Artisan Partners Asset Management. Please go ahead.

Unknown Executive

Welcome to the Artisan Partners Asset Management business update and earnings call.

Today's call will include remarks from Jason Gottlieb, CEO; and C.J. Daley, CFO. Following these remarks, we will open the line for questions.

Our latest results and investor presentation are available on the Investor Relations section of our website.

Before we begin today, I would like to remind you that comments made during today's call, including responses to questions, may include forward-looking statements. These are subject to known and unknown risks and uncertainties, including, but not limited to, the factors set forth in our earnings release and detailed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those disclosed today, 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 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'll now turn it over to Jason.

Jason Gottlieb

Thank you for joining the call today.

Artisan Partners is a talent-driven investment platform that brings together exceptional investors, the autonomy to pursue disciplined investment processes and the resources and business leadership necessary to build enduring investment franchises. We believe this combination differentiates Artisan Partners and drives long-term value creation for clients and shareholders.

Our third quarter results reflect both the strength and the challenges of our business. While investment performance and client flows were challenged in portions of our equity platform, we continue to demonstrate the growth potential of our expanding credit and alternatives businesses. We are also making meaningful progress broadening our investment capabilities, developing new investment vehicles and positioning the platform for future growth.

Investment performance is the foundation of everything we do. Our long-term investment results across asset classes, investment franchises, investing styles and inception dates demonstrates the strength and consistency of our platform. At quarter end, 92% of our assets under management outperformed their benchmarks over 10 years and 99% since inception gross of fees.

Short-term investment performance was less favorable during the quarter with relative underperformance across several of our larger equity strategies. The 1 and 3-year numbers shown on the slide were particularly impacted by the performance of our International Value and Global Value strategies, both of which have had very strong performance in October. Calculated as of October 26, 75% and 84% of our AUM are outperforming over the trailing 1 and 3-year periods, respectively.

We continue to see strong results in credit and alternatives. 100% of our credit AUM has outperformed the benchmark over the reported time periods since inception of our first credit franchise in 2014.

EMsights Capital Group has also established an outstanding investment track record. All 3 of the franchise's strategies have generated double-digit annualized returns since inception, gross of fees and meaningful excess returns relative to their respective benchmarks. These results demonstrate the breadth of our multi-asset investment platform and reinforce our confidence in the long-term value of our business.

Turning to Slide 4. Net client outflows totaled $10.6 billion for the quarter. As previously disclosed, approximately $7.8 billion of the net outflows included $1.9 billion associated with the U.S. Value team wind-down and $5.9 billion related to the rebalancing a large Global Value client relationship.

Business development in credit and alternatives remained strong. Combined, our credit and alternative strategies generated $1.1 billion in net inflows during the third quarter and have raised $3.2 billion year-to-date. For the quarter, credit strategies generated approximately $290 million of net inflows, marking the 17th consecutive quarter of positive credit flows, and we raised approximately $770 million in alternatives, led by strong growth in the Artisan Global Unconstrained Mutual Fund.

Turning to the next slide. Over the past 5 years, combined credit and alternatives AUM has nearly doubled to more than $26 billion, increasing from 8% to 15% of firm-wide AUM. During that period, we have added custom credit solutions and the Floating Rate strategy to the Artisan Credit team's lineup.

We have onboarded the EMsights Capital Group and launched Global Unconstrained, emerging market debt opportunities and emerging market local opportunities. We have added fixed income talent to the International Value Group and launched the Global Special Situation strategy. And at the beginning of this year, we acquired Grand View Property Partners and recently closed on an anchor investor for their fourth flagship fund.

The Artisan Credit team demonstrates what we believe we can accomplish with each of these other franchises. Since launching in 2014, the credit team has established an outstanding investment track record and built a diversified credit business with over $16 billion in assets under management. We see significant opportunities to build on that success by expanding the team's investment capabilities across public and private credit, broadening its geographic reach and developing new investment vehicles. These initiatives represent the next phase of growth for our credit franchise, leveraging the team's established investment expertise and our broader operating and distribution capabilities.

Across our platform, including equities, we are working with our investment teams to further develop their franchises, broaden degrees of freedom, increase the breadth and quality of talent and expand the ways clients can access their investment expertise.

During 2026, we have launched 13 new UCITS fund share classes to complement our expanding reach into the U.K. and European wealth market. In the fourth quarter, we anticipate launching an ETF share class of the Artisan Select Equity Fund and Artisan Focus Fund to broaden investor access in the wealth market. And we are developing an interval fund structure to bring our public and private credit capabilities to wealth clients in 2027.

We believe the opportunity set available to Artisan today is broader than at any point in our history. We have proven our platform works across equities, credit and alternatives. We are excited about further growing with existing franchises as well as partnering with external talent via lift-outs or acquisitions. We can do more and move faster yet stay true to our principles, maintaining the highest investment standards, aligning interests, delivering a distraction-free investment environment and maintaining a long-term orientation.

I will now turn the call over to CJ to discuss our financial results.

Charles Daley

Thanks, Jason. Our complete GAAP and adjusted results are detailed in our earnings release.

Assets under management ended the quarter at $169 billion, a decrease of 8% from the June quarter and 7% from a year ago. Approximately 75% of the net outflows that contributed to the quarterly AUM decline were attributable to 2 discrete events Jason discussed. Both events had a relatively modest impact on revenues in the quarter. Average assets under management were $180.5 billion, down 1% sequentially and up 2% compared to the September 2025 quarter. Year-to-date average AUM improved 7% over the prior 9-month period.

Revenues for the quarter were $313 million, up 1% from the June quarter, primarily reflecting an additional day during the quarter and a slight increase in our average fee rate, which more than offset the modest decline in average AUM. Compared to the September 2025 quarter, revenue increased 4%, driven by higher average assets under management and an increase in our average fee rate.

Our weighted average fee rate for the quarter increased to 69 basis points, up from the June quarter. The increase primarily reflects the impact of the 2 previously mentioned discrete redemption events.

Adjusted operating expenses declined 2% from the June quarter, primarily reflecting a decline in employee-related costs and the continued roll-off of seasonal expenses, offset in part by increased variable incentive compensation associated with increased revenues.

Compared to the prior year quarter, adjusted operating expenses increased 5%, primarily reflecting higher employee-related and professional fee expenses as well as the addition of the operating expenses of Grandview Property Partners, which we acquired in January of this year. As a result, adjusted operating income increased 9% sequentially. Adjusted operating margin expanded 260 basis points to 35.5%. And adjusted earnings per share increased to $1.03.

Compared to the same quarter in 2025, adjusted operating income increased 2% and adjusted earnings per share increased 1%. Our adjusted operating margin declined 70 basis points, primarily reflecting the higher operating expense.

Year-to-date, average AUM and revenues increased 7% compared to the first 9 months of last year. Year-to-date adjusted operating expenses increased 8%, reflecting higher incentive compensation associated with increased revenues, employee-related costs and the addition of Grandview.

Adjusted operating income increased 6% to $307 million. Adjusted operating margin was relatively stable at 33% and adjusted earnings per share increased 6% to $2.84. In our non-GAAP measures, nonoperating income includes only interest income and expense.

Our balance sheet remains strong with $352 million of cash.

During the quarter, we renewed and expanded our 5-year revolving credit facility to $150 million. The facility remains unused and added capacity furthers our flexibility to support future growth.

Consistent with our dividend policy, our Board of Directors declared a quarterly dividend of $0.88 per share for the September 2026 quarter, representing a 10% increase from the prior quarter and unchanged from a year ago. Our strong balance sheet and cash generation provide the flexibility to continue investing in our business while maintaining an attractive shareholder return profile.

Looking ahead, the fourth quarter begins with lower AUM levels and a higher average fee rate as a result of the 2 discrete AUM outflows and lower fee rates. The fourth quarter will also include the annual income and capital gains mutual fund distribution, which we currently estimate will reduce AUM by $2.5 billion for distributions that will not be reinvested.

As a reminder, approximately 3% of our AUM is subject to performance fees with the majority crystallizing on December 31 each year. Last year's fourth quarter included approximately $29 million of performance fees. We are currently projecting a similar contribution this year. However, all such fees will remain subject to market and performance conditions through the end of the year.

That concludes my prepared remarks. I will now turn the call back to the operator.

Operator

We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from Kenneth Lee with RBC Capital Markets.

질의응답

Kenneth Lee

Just one on the interval fund structure that's being developed for next year. Just curious, could you talk a little bit more about the opportunity here? What sort of potential demand are you seeing across the wealth clients? And then, would this be leveraging some of the existing strategies within the credit teams?

Jason Gottlieb

Yes, it will certainly leverage some of the strength that we currently have on the platform, specifically in the credit business. We've talked at length about the convergence of capital and the need for more flexible solutions and the interval fund is clearly the ability to capture that. The crossover between private and public markets, we just see that big convergence and we're actually seeing a fair bit of demand. We've been out there talking to several of our key relationships just to gauge their appetite. And I think the reception that we're experiencing at least initially is pretty warm.

So it continues to give us confidence that clients are willing to not only continue to evaluate and look at us as a key leader within the credit space, but also provide us with the degrees of freedom that we need to express the views that we have in an effort to produce the best returns possible. And so we're pretty confident that this is going to be an interesting, and important and growing initiative for us when it comes to just broadening out our credit business.

Kenneth Lee

And just one follow-up if I may. I wonder if you could just talk a little bit more about some of the RFP due diligence activity you've been seeing recently. Maybe just talk about client sentiment generally across the board.

Jason Gottlieb

Yes, it's a good question. It's something that we actually spend a fair bit of time on, Ken. And you don't want to count anything until it's actually in the door. But when we look at -- and everything that's in the RFP and in the -- just the overall pipeline, clearly, there's some subjectivity that goes into some of the data, a lot of the data.

And the RFP numbers haven't really shifted tremendously quarter-over-quarter or year-over-year. However, the pipeline has grown pretty meaningfully. But as I mentioned, it really doesn't matter to any of us unless it's actually crystallized and brought in the door. But to directly answer your question, we do see a pretty meaningful uptick in the dollars associated with the pipeline, but the RFP numbers remaining relatively flat or consistent from a quarter-over-quarter and year-over-year perspective.

Operator

The next question comes from Bill Katz with TD Cowen.

William Katz

I want to come back to your thoughts on sort of continuing to scale out the credit platform. I think you mentioned that you have opportunities geographically by wrapper, by distribution channel.

Could you click in a little bit and maybe give us a sense of where you see the greatest opportunities, whether it be in the public private side in the private side? I was curious of where you see the best opportunity.

Jason Gottlieb

Yes, I think there's multiple ways to grow within credit. The first one is we have capacity that we can continue to build out and further expand. I think we had mentioned last quarter, Bill, that we had a nice win in our Floating Rate business. We think that's an area and a path to continued growth. We've got I don't know exactly what the track record longevity is, but it's nearing the 5-year mark, and that will be a key metric. The returns are good and the peer rankings are solid, and it comes inside of a franchise that is obviously very highly regarded.

We think from an alternatives positioning within our credit platform, being able to continue to grow and expand incrementally the Credit Opportunities strategy remains very much in place. The public-private interval fund that I had mentioned, we think is going to be a strong long-term grower if we, in fact, are able to launch, which we have conviction in our ability to get that done.

And then the third piece, specifically just within our credit franchise is what I mentioned, which is going global. And so tapping into the European market in both the syndicated loan and bond market, but also the potential to do something that's a little bit more unique to us, which is potentially expanding into CLOs.

We also are about to launch, I believe it's on November 2, if my memory serves me correctly, we're going to be expanding out our EMsights strategy capabilities within the European market. So we're going to be launching UCITS for Global Unconstrained. And we believe that the appetite for Global Unconstrained in the European market is going to be very much aligned to how the demand looks like and feels like in the U.S. market where we've seen really nice and meaningful growth on the heels of their strong performance.

And so I think those are probably the key levers for us on the existing platform. I can anticipate that there's going to be some questions as it relates to the pipeline. So maybe I'll just hit that as well while we're just talking about it, because I think if you split the pipeline up between credit and alternatives, a lot of the opportunity set that we're seeing today right in front of us is in the credit area, specifically aligned to wealth.

And similar to what I mentioned about our pipeline with Ken, the pipeline is just that. It's a pipeline until somebody crosses the finish line, then it's still just an idea that we're evaluating and attempting to make a decision on whether it makes sense for the platform.

But I would just highlight that the majority of the opportunity in front of us today feels very much aligned to both credit and to wealth, which, as you've heard us talk about, those are 2 very important initiatives that we're trying to continue to build off of.

William Katz

And the other one, I'm going to cheat a little bit and ask a 2-part question. So first part, can you talk a little bit about where you stand in terms of additional M&A to continue to broaden out inorganically?

And then just the lesson, I think, from the last couple of announcements on these large mandates is just concentration risk. So can you talk a little bit about the top 5, top 10 clients, what kind of percentage of their AUM or revenues that, that comprises of?

Jason Gottlieb

Sure. So on the M&A side, there's just aligned to my prior comment on credit, we think that it's going to come in both lift-out form and in M&A, 2 in particular that we're talking to and growing in our conviction are going to be more along the lines of the M&A. So slightly leaning a little bit more towards the inorganic. So that's where we're seeing at least on the credit side.

And I think that's very much aligned to how we're also seeing the pipeline develop on the alternative side, which is really coming in the form of the 2 or 3 areas that I think are most compelling to us are private credit, secondaries businesses, and we are seeing some interesting private equity opportunities, primarily in sector-specific, where we're evaluating a couple of live opportunities.

I'll turn it over to CJ. He can talk a little bit about the concentration risk.

Charles Daley

Yes, Bill, I would say when we think about our largest clients and concentration, our largest clients are really diversified across teams, strategies and channels. If you think about our top 15% to 20% of clients, it's across 6 teams, 9 strategies. And then on the wealth side, it's across a handful of clients and in their platform across different channels within the wealth. So it's broadly diversified and not highly concentrated just with one or 2 clients or channels or strategies and teams.

Operator

The next question comes from Alex Blostein with Goldman Sachs.

Alexander Blostein

Just to expand some of the discussion around some of the recent performance, and you guys highlighted that International and Global Value both have struggled on a 1 and 3-year basis recently, things have gotten a little bit better, which is encouraging.

But how are you messaging, I guess, to clients, given the fact that these strategies are still quite sizable in the context of the firm? How are you messaging recent performance trends to clients? What kind of potential redemption risk, I guess, you guys still see from these products as we look out over the next 12 to 18 months?

Jason Gottlieb

Yes. I think with every strategy not specific to Global Value or International Value, I think the great thing about our platform is we have highly sophisticated clients that -- many of which have been with us for years, if not decades. And so they fully understand and completely appreciate not only the approach that each of our teams take and how they develop their investment strategies and how they invest. But they also recognize that with alpha, there is unpredictability and with alpha, there's also volatility.

And so I think a lot of our teams and David and Dan O'Keefe are no different here where they're talking about the philosophy, the process and the ability to build a portfolio that in times where performance doesn't look great relative to a benchmark, that can be sometimes the best opportunity set for them to lean into various markets or existing positions that are unloved and build a very compelling portfolio.

And so Q3 was very difficult. I should have highlighted in my prepared comments, I'll highlight it now since you asked the question. If you think about the breadth in the markets, which again goes back to my comment about sophisticated clients, they see this and they recognize it. The breadth in the market is the worst we've experienced since 2000.

And one of the examples that I would highlight is the markets broadly, if you use the S&P 500, it's 2% from its all-time high at the end of Q3, and yet the average stock is about 17% off of its all-time high. So you can just see really the lack of breadth and it's pretty stark what we're seeing. So when there is a return to normalcy, we think our teams, and David and Dan will be no different here. They will have the ability to capture that opportunity set in a pretty meaningful way.

And so we're continuing to extol the virtues of each of the team's philosophies and processes, recognizing that we are staying true to who we are and the disciplines that we undertake. And I think a lot of our clients recognize a 1- and a 3-year period, that's a relatively short evaluation period, even especially for teams that have been in existence for 25-plus years.

And even in Q3 with the shortfall of performance, both of them were basically at benchmark over a 3-year period. So it wasn't like we had a massive hole to dig ourselves out of. Now with a 300 to 400 basis point tailwind coming into October, they're clearly meaningfully ahead over a 1 year and certainly well ahead over a 3-year as well.

Alexander Blostein

Great. That's super helpful context.

Second question for me, I just wanted to hit on a couple of financial items. TJ, maybe this is for you. On the fee rate, a couple of moving pieces in the quarter. So maybe just give us a sense of the jumping off point for Q4 on the fee rate. But more importantly, given the fact that the business is sort of shifting and there's some headwinds on the wrappers, obviously, some of the more active equity business that tends to be higher fee has been shrinking, but then you have the alts that are growing and you're expanding into other wealth products within credit, which presumably are at a little more of a healthy fee rate than some of the institutional mandates.

So based on kind of where you see the business evolving over the next, call it, one to 2 years, what's the trajectory for firm-wide fee rate in your view?

Charles Daley

I think we sort of highlighted we think the fee rate should be up commensurable with what we saw at the end of the quarter, somewhere around 70 basis points, up probably a little over 100 basis points than where we were trending. And for now, we see that relatively stable. I mean I think you hit the nail on the head with fee rate trajectory is largely going to depend on where we see the attrition. Obviously, our mutual fund business which has been in decline in the equity space has higher average fee rates, and we've been seeing that offset with higher fee rates in the alt space.

So depending on where the flows outpace each other, you could see us relatively stable, I think, was what our expectation would be before we see any major trend one way or the other.

Jason Gottlieb

Just to add a little bit to that. The institutional business within equity is clearly where we're seeing a lot of active to passive, some rebalancing activity, some derisking. So plans that are hitting their funding targets in the DV market are derisking -- but those mandates tend to be on the lower end of our fee spectrum, just given the size and the scale that they tend to bring to the firm. And then juxtapose that against where we are building capacity and capabilities in our existing franchises, some of which we haven't talked about, but things like the interval fund, which should bring a commensurately higher fee level.

Grandview Property Partners, as I've mentioned, we just closed on our first anchor, and we're going to be out in the market raising our new flagship series fund, which should come in at a commensurately higher fee level given the nature of the asset class.

We just brought on John Brudnick as a list out from Sachem Head, which we'll be launching in a long-short format, which we believe will come with a higher fee relative to where our existing platform and business is today. And again, some of the R&D on some of the equity teams that we're working on, if we do bring them out into the public domain, we think that those will also have a commensurately higher fee level.

So maybe just to CJ's point, I think the fee might be the same, but I think the offsets will be coming in areas where we think there's good growth opportunities and certainly an expectation for long-term client demand.

Charles Daley

And Alex, one other thing when you think about the short term, obviously, we have greatest opportunity to achieve performance fees in the fourth quarter. So we typically see a spike in the overall fee rate, but the recurring fee rate, which I talked about at 70 is just sort of recurring management fee. The performance fees, if they come to fruition, should spike that a bit in the fourth quarter.

Operator

The next question comes from John Dunn with Evercore ISI.

John Dunn

Maybe on the ETF share classes, is there any difference in strategy for selling those? And what's kind of the strategy for pricing them? And are you going to be launching them in kind of phases or all at once?

Jason Gottlieb

On the ETFs, the strategy, if our anticipated launch is approved, which we still have some regulatory and Board hurdles to get through, but we don't anticipate having any problems. If they are launched, they will be pari passu to the existing strategies. So we're not looking to compete against ourselves. We're not looking to do it at a lower fee rate. We are really just trying to provide our existing and future clients access to our IP in a wrapper that is clearly the preferred option.

And so we are going to be staging these launches out, these anticipated launches out over the course of the next several quarters. We're going to start with the 2 that I've mentioned, Select Equity and the Focus Fund. Those will be hopefully followed by a few more in Q1 and then again, anticipating several more throughout the course of 2027. And so this will be a deliberate approach and process that we're undertaking.

But to directly answer your question, we're not competing on fee against ourselves. This is really just the ability to be vehicle agnostic and provide clients with access, and opportunity and choice in a wrapper that is clearly the preferential option in today's market.

John Dunn

Got it. And then you talked about going more global with some strategies. Could you talk about kind of in terms of international distribution, any differences you're seeing in demand by region or different like preferences for strategies in different regions?

Jason Gottlieb

Yes. We're excited about what we're doing in our non-U.S. business as it relates to distribution, similar to what we talked about over the past couple of quarters in the U.S. market where we have been expanding, deliberately expanding our U.S. footprint. We're doing the same in the wealth market, both in U.K. and Europe and in the Middle East. We placed a couple of resources in those regions. And we are seeing a meaningful uptick in the activity levels.

Part of the pipeline conversation that I hit on with Ken's question, I think a lot of that is also coming in the form of those regions.

As I mentioned in my prepared comments, we're just trying to stay open for business here and taking away any of the impediments that might be associated with investing on our platform. And so we've deliberately launched several share classes in areas where we think whether it's a currency or a reinvestment share class, there's different ways to access our platform now that you just weren't able to access in the past. And this has come from direct feedback through all these client conversations that the new folks are having.

It's still early days. The ramp is going to take a little time. And if we see the green shoots that develop in, in the form of crystallization, then we can continue to add resources into that marketplace.

One area that we are excited about expanding in is certainly the credit capabilities and alternatives, which is why we're deliberately launching the Global Unconstrained strategy and UCITS form. We've heard time and again that people are looking for diversifiers. And we think we've got one of, if not the best in the business in a daily liquid wrapper that people are very excited about.

Operator

We have a follow-up from Bill Katz with TD Cowen.

William Katz

So just maybe some housekeeping items. CJ, I was wondering if you could give us an update on the fixed cost outlook from here and maybe how you might be preliminary thinking through 2027. And then thank you for the guide on performance fees. Could you unpack that a little bit in terms of what areas you're seeing the strength in and how we should think about any kind of different payout rate on comp relative to the base business?

Charles Daley

Okay, sure. So with respect to the fixed cost outlook, I think that it remains unchanged from what we gave at the beginning of the year. So we guided to mid-single digits if you think about excluding the addition of the cost from Grandview, which we acquired in January and then the exchange of KIX with the LTI grant that we did in 2026 with what was rolling off from the 5-year earlier grant. So that guidance hasn't changed at all.

And then on the performance fees, I mean, largely, we're seeing the same trends that we saw last year. In my prepared remarks, I said through September 30, we're currently estimating a similar outcome to last year. Obviously, we have a couple of months to go with performance. So that could change either to the downside or upside.

But we're seeing a very good strong performance fee opportunities in our EMsights team, which we saw last year, which accounts for a significant amount of the performance fee opportunity.

Just a little bit more. We have, what, 8 accounts or 8 teams that have performance fee accounts. And as of right now, 7 of those 8 are in the money. So it's broadly dispersed and diversified across all of our opportunities.

Operator

This concludes our question-and-answer session and the Artisan Partners Asset Management business update and earnings call. Thank you. You may now disconnect.