Artisan Partners' second quarter arrived with the company's AUM engine back on its strongest footing in two years and its newest franchise - real estate private equity - already on the books. The headline read flat: total revenue of $307.9 million was up 9% year over year, GAAP diluted earnings per share of $1.11 were up 18%, and adjusted earnings per share of $0.94 were up 13%. But the headline concealed a sharper and more interesting trade. Market appreciation drove $21.2 billion of the $10.4 billion AUM increase; net client cash outflows of $10.5 billion - concentrated in the U.S. Value team ($6.4 billion) and the Growth team ($2.8 billion) - dragged against it, and management is now winding down the U.S. Value strategies. The quarter was carried by the market, not by flows. The thesis heading into the rest of 2026 is whether the credit and alternatives engine that already contributed $1.0 billion of net inflows can keep doing the work as the equity book keeps shedding assets.
Two structural items sat alongside the operating numbers. First, the January 2 acquisition of Grandview Property Partners closed inside the quarter, adding $837 million of AUM, $8.2 million of intangibles, and $40.3 million of goodwill, plus a $26.1 million contingent consideration liability tied to committed-capital and revenue run-rate milestones over the next seven years. Second, the company raised its quarterly dividend 4 cents to $0.80 per Class A share - a 5% increase - payable August 31 to holders of record August 17. On a $41.78 reference price (the August 12 close), the new run-rate implies a 7.7% forward yield, an unusually rich number for an actively-managed, mid-cap asset manager with a $183 billion AUM platform and a $458.7 million LTM adjusted EBITDA engine. The dividend is the loudest single line in this report: it is the company's own read on what its earnings stream can sustain at a price the market has set. At roughly 6.1x EV/LTM adjusted EBITDA, 2.3x EV/LTM revenue, and 10x LTM adjusted earnings, Artisan trades at the lower end of its active-manager peer set while paying out a yield few of those peers can match. The investment question is whether the equity outflows are a controllable wind-down of one team, or the leading edge of a broader active-equity share-loss problem the rest of the year will surface.