Cuộc họp công bố kết quả kinh doanh quý 3/2026 của Artisan Partners (APAM): Dòng tiền rút ra 10,6 tỷ USD, tăng trưởng tín dụng

Điểm chính

• Tài sản quản lý vào cuối quý đã giảm xuống còn 169 tỷ USD, giảm 8% so với quý trước và 7% so với cùng kỳ năm ngoái, khi dòng vốn ra ròng của khách hàng đạt 10,6 tỷ USD.
• Khoảng 7,8 tỷ USD dòng vốn ra ròng đến từ hai sự kiện riêng biệt: 1,9 tỷ USD liên quan đến việc đóng cửa nhóm U.S. Value và 5,9 tỷ USD từ việc tái cân bằng danh mục của một khách hàng lớn thuộc chiến lược Global Value.
• Doanh thu tăng lên 313 triệu USD, tăng 1% so với quý trước và 4% so với cùng kỳ năm ngoái. EPS điều chỉnh tăng lên 1,03 USD, trong khi biên lợi nhuận hoạt động điều chỉnh tăng 260 điểm cơ bản so với quý trước lên 35,5%.
• Mảng tín dụng và các khoản đầu tư thay thế đã tạo ra 1,1 tỷ USD dòng vốn vào ròng trong quý 3 và 3,2 tỷ USD từ đầu năm đến nay. Mảng tín dụng đã ghi nhận quý thứ 17 liên tiếp có dòng vốn vào ròng dương.
• Hiệu suất dài hạn vẫn duy trì mạnh mẽ, với 92% AUM vượt hiệu suất chỉ số tham chiếu trong 10 năm và 99% vượt hiệu suất kể từ khi thành lập, chưa trừ phí. Hiệu suất cổ phiếu ngắn hạn trong quý bớt khả quan hơn.
• Ban lãnh đạo dự kiến phí quản lý thường xuyên quý 4 sẽ bắt đầu ở mức gần 70 điểm cơ bản. Công ty cũng ước tính các khoản phân phối quỹ tương hỗ không được tái đầu tư sẽ làm giảm AUM 2,5 tỷ USD.

Dữ liệu tài chính cốt lõi

Kết quả hoạt động kinh doanh và vận hành

Tín dụng và các khoản đầu tư thay thế tiếp tục là nguồn tăng trưởng hữu cơ chính. Các chiến lược tín dụng tạo ra khoảng 290 triệu USD dòng vốn vào ròng, trong khi các khoản đầu tư thay thế huy động được khoảng 770 triệu USD, dẫn đầu là Quỹ tương hỗ Artisan Global Unconstrained.

Tổng AUM của mảng tín dụng và các khoản đầu tư thay thế đã tăng gần gấp đôi trong 5 năm lên hơn 26 tỷ USD, tăng từ 8% lên 15% tổng AUM toàn công ty. Nhóm Artisan Credit quản lý hơn 16 tỷ USD, và tất cả AUM tín dụng đều vượt hiệu suất chỉ số tham chiếu trong các kỳ báo cáo.

Cả ba chiến lược của EMsights Capital Group đều mang lại lợi nhuận quy năm đạt hai chữ số kể từ khi thành lập, chưa trừ phí, cùng với lợi nhuận thặng dư so với các chỉ số tham chiếu tương ứng. Artisan cũng có kế hoạch mở rộng chiến lược Global Unconstrained sang Châu Âu thông qua việc ra mắt quỹ UCITS.

Công ty đã ra mắt 13 hạng cổ phiếu UCITS mới trong năm 2026 để mở rộng khả năng tiếp cận tại thị trường quản lý tài sản tại Anh và Châu Âu. Tùy thuộc vào sự phê duyệt của cơ quan quản lý và hội đồng quản trị, công ty dự kiến sẽ giới thiệu các hạng cổ phiếu ETF cho Quỹ Artisan Select Equity Fund và Artisan Focus Fund trong quý 4, sau đó là các đợt ra mắt bổ sung trong năm 2027. Ban lãnh đạo cho biết các hạng cổ phiếu ETF sẽ được định giá tương đương với các chiến lược hiện tại chứ không dùng để cạnh tranh về phí.

Artisan cũng đang phát triển một quỹ định kỳ (interval fund) cho năm 2027, kết hợp các năng lực tín dụng công và tư cho các khách hàng quản lý tài sản. Ban lãnh đạo mô tả phản hồi ban đầu từ các đối tác quan trọng là tích cực, nhưng sản phẩm vẫn đang trong quá trình phát triển.

Triển vọng của Ban lãnh đạo

Ban lãnh đạo cho biết quý 4 bắt đầu với AUM thấp hơn nhưng tỷ lệ phí trung bình cao hơn sau hai sự kiện rút vốn lớn. Giám đốc Tài chính (CFO) C.J. Daley chỉ ra rằng tỷ lệ phí quản lý thường xuyên sẽ ở mức khoảng 70 điểm cơ bản và duy trì tương đối ổn định trong ngắn hạn.

Công ty ước tính rằng các khoản phân phối thu nhập và thặng dư vốn hàng năm không được các nhà đầu tư quỹ tương hỗ tái đầu tư sẽ làm giảm AUM quý 4 2,5 tỷ USD.

Khoảng 3% AUM phải chịu phí hiệu quả đầu tư, hầu hết trong số đó được chốt vào ngày 31 tháng 12. Ban lãnh đạo hiện ước tính mức đóng góp tương tự như khoảng 29 triệu USD đã ghi nhận trong quý 4/2025, tùy thuộc vào diễn biến thị trường và hiệu suất đầu tư cho đến cuối năm. 7 trong số 8 nhóm hoặc tài khoản có thỏa thuận phí hiệu quả đầu tư đang có lãi tại thời điểm diễn ra cuộc họp.

Triển vọng chi phí cố định vẫn không đổi ở mức tăng trưởng ở mức giữa một chữ số, không bao gồm chi phí của Grand View Property Partners và tác động của đợt trao đổi KIX và khoản thưởng dài hạn do ban lãnh đạo mô tả.

Rủi ro và các yếu tố cần theo dõi

Hiệu suất tương đối ngắn hạn đã suy yếu ở một số chiến lược cổ phiếu lớn trong quý 3, đặc biệt là International Value và Global Value. Ban lãnh đạo cho biết cả hai đều đã cải thiện đáng kể trong tháng 10, góp phần đưa 75% AUM vượt hiệu suất trong 1 năm và 84% trong 3 năm tính đến ngày 26 tháng 10, chưa trừ phí.

Cổ phiếu định hướng nhà đầu tư tổ chức tiếp tục đối mặt với sự dịch chuyển từ đầu tư chủ động sang thụ động, việc tái cân bằng danh mục và giảm thiểu rủi ro của các kế hoạch được tài trợ. Những áp lực này có thể ảnh hưởng đến dòng vốn, mặc dù ban lãnh đạo lưu ý rằng các hợp đồng ủy thác lớn của tổ chức thường có tỷ lệ phí thấp hơn.

Con số dòng vốn ra ròng trong quý 3 bị ảnh hưởng lớn bởi hai sự kiện riêng biệt. Ban lãnh đạo cho biết các mối quan hệ khách hàng lớn nhất của họ vẫn được đa dạng hóa trên nhiều nhóm, chiến lược và kênh phân phối, nhưng việc rút vốn và tái cân bằng danh mục của khách hàng trong tương lai vẫn là những biến số quan trọng đối với AUM và doanh thu.

Phí hiệu quả đầu tư, các đợt ra mắt sản phẩm theo kế hoạch và các thương vụ thâu tóm tiềm năng vẫn còn phụ thuộc vào các điều kiện. Phí hiệu quả phụ thuộc vào kết quả đến cuối năm, các đợt ra mắt ETF cần sự phê duyệt của cơ quan quản lý và hội đồng quản trị, còn các cơ hội trong mảng tín dụng, tín dụng tư nhân, thị trường thứ cấp và quỹ tư nhân chuyên biệt theo ngành vẫn đang được đánh giá.

Những điểm chính trong phần Hỏi & Đáp với chuyên gia phân tích

• Mở rộng tín dụng: Ban lãnh đạo đã xác định tín dụng lãi suất thả nổi, Cơ hội Tín dụng (Credit Opportunities), quỹ định kỳ công - tư, các khoản vay hợp vốn và trái phiếu Châu Âu, cùng khả năng mở rộng sang CLO là các động lực tăng trưởng.
• Kênh phân phối tiềm năng: Hoạt động RFP nhìn chung ổn định so với quý trước và so với cùng kỳ năm ngoái, nhưng ban lãnh đạo cho biết giá trị đồng USD của các dự án tiềm năng mở rộng đã tăng lên đáng kể. Phần lớn cơ hội hiện tại gắn liền với các kênh tín dụng và quản lý tài sản.
• M&A và bổ sung nhân sự nhóm: Artisan đang đánh giá cả việc tuyển dụng trọn đội ngũ (lift-out) và các thương vụ thâu tóm. Ban lãnh đạo đã đề cập đến hai cơ hội tín dụng mang định hướng M&A rõ rệt hơn, cũng như các giao dịch tiềm năng trong mảng tín dụng tư nhân, thị trường thứ cấp và quỹ tư nhân chuyên biệt theo ngành.
• Cơ cấu tỷ lệ phí: Việc sụt giảm tài sản quỹ tương hỗ cổ phiếu có mức phí cao hơn đang được bù đắp bằng sự tăng trưởng ở các sản phẩm thay thế có mức phí cao hơn và các sản phẩm theo kế hoạch như quỹ định kỳ, quỹ chủ lực tiếp theo của Grand View Property Partners và chiến lược mua - bán khống (long-short) gắn liền với đợt tuyển dụng đội ngũ của John Brudnick.
• Nhu cầu quốc tế: Artisan đã bổ sung thêm nguồn lực phân phối tại Anh, Châu Âu và Trung Đông. Ban lãnh đạo đã báo cáo mức độ hoạt động cao hơn, đặc biệt là xung quanh mảng tín dụng, các sản phẩm thay thế và các chiến lược đa dạng hóa, đồng thời nhấn mạnh rằng đợt mở rộng này vẫn đang ở giai đoạn đầu.

Toàn văn biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

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.

Phần hỏi đáp

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.