10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2014
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-35826

Artisan Partners Asset Management Inc.

(Exact name of registrant as specified in its charter)

Delaware	45-0969585
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
875 E. Wisconsin Avenue, Suite 800 Milwaukee, WI	53202
(Address of principal executive offices)	(Zip Code)

(414) 390-6100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o
Non-accelerated filer þ	(Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of outstanding shares of the registrant’s Class A common stock, par value $0.01 per share, Class B common stock, par value $0.01 per share, and Class C common stock, par value $0.01 per share, as of May 5, 2014 were 29,133,585, 21,566,436 and 20,370,787, respectively.

TABLE OF CONTENTS

		Page
Part I	Financial Information
Item 1.	Unaudited Consolidated Financial Statements
	Unaudited Condensed Consolidated Statements of Financial Condition as of March 31, 2014 and December 31, 2013	1
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013	2
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2014 and 2013	3
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2014 and 2013	4
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
Part II	Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	40

Except where the context requires otherwise, in this report, references to the “Company”, “Artisan”, “we”, “us” or “our” refer to Artisan Partners Asset Management Inc. (“APAM”) and its consolidated subsidiaries, including Artisan Partners Holdings LP (“Artisan Partners Holdings” or “Holdings”). On March 12, 2013, APAM closed its initial public offering and related corporate reorganization. Prior to that date, APAM was a subsidiary of Artisan Partners Holdings. The reorganization and initial public offering are described in the notes to our consolidated financial statements included in Part I of this Form 10-Q.

Forward-Looking Statements

This report contains, and from time to time our management may make, forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue”, the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions, may include projections of our future financial performance, future expenses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in our business or financial results. These statements are only predictions based on our current expectations and projections about future events. Among the important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, adverse economic or market conditions, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Artisan Partners brand and other factors disclosed under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on February 26, 2014, which is accessible on the SEC’s website at www.sec.gov. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Forward-looking statements include, but are not limited to, statements about:

• our anticipated future results of operations;

• our potential operating performance and efficiency;

• our expectations with respect to future levels of assets under management, inflows and outflows;

• our financing plans, cash needs and liquidity position;

• our intention to pay dividends and our expectations about the amount of those dividends;

• our expected levels of compensation of our employees;

• our expectations with respect to future expenses and the level of future expenses;

• our expected tax rate, and our expectations with respect to deferred tax assets; and

• our estimates of future amounts payable pursuant to our tax receivable agreements.

Part I — Financial Information

Item 1. Financial Statements

ARTISAN PARTNERS ASSET MANAGEMENT INC. Unaudited Condensed Consolidated Statements of Financial Condition (U.S. dollars in thousands, except per share amounts)
	March 31, 2014			December 31, 2013
ASSETS
Cash and cash equivalents	$	208,371		$	211,839
Cash and cash equivalents of Launch Equity	30,263			19,156
Accounts receivable	62,219			64,110
Accounts receivable of Launch Equity	—			7,428
Investment securities	17,911			7,804
Investment securities of Launch Equity	60,528			63,364
Property and equipment, net	9,998			8,760
Deferred tax assets	474,789			187,907
Prepaid expenses and other assets	13,049			11,030
Total assets	$	877,128		$	581,398
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable, accrued expenses, and other	$	48,672		$	45,369
Accrued incentive compensation	64,580			3,580
Borrowings	200,000			200,000
Amounts payable under tax receivable agreements	405,207			160,663
Accounts payable of Launch Equity	869			7,485
Securities sold, not yet purchased of Launch Equity	38,222			31,990
Total liabilities	$	757,550		$	449,087
Commitments and contingencies
Common stock
Class A common stock ($0.01 par value per share, 500,000,000 shares authorized, 29,133,585 and 19,807,436 shares outstanding at March 31, 2014 and December 31, 2013, respectively)	291			198
Class B common stock ($0.01 par value per share, 200,000,000 shares authorized, 21,566,436 and 25,271,889 shares outstanding at March 31, 2014 and December 31, 2013, respectively)	216			253
Class C common stock ($0.01 par value per share, 400,000,000 shares authorized, 20,370,787 and 25,206,554 shares outstanding at March 31, 2014 and December 31, 2013, respectively)	204			252
Convertible preferred stock ($0.01 par value per share, 15,000,000 shares authorized, 455,011 and 1,198,128 shares outstanding at March 31, 2014 and December 31, 2013, respectively)	13,257			34,909
Additional paid-in capital	65,485			6,388
Retained earnings (deficit)	(24,419		)	1,401
Accumulated other comprehensive income (loss)	582			378
Total stockholders’ equity	55,616			43,779
Noncontrolling interest - Artisan Partners Holdings	12,263			38,060
Noncontrolling interest - Launch Equity	51,699			50,472
Total equity	119,578			132,311
Total liabilities and equity	$	877,128		$	581,398

The accompanying notes are an integral part of the consolidated financial statements.

1

ARTISAN PARTNERS ASSET MANAGEMENT INC. Unaudited Consolidated Statements of Operations (U.S. dollars in thousands, except per share amounts)
	For the Three Months Ended March 31,
	2014			2013
Revenues
Management fees	$	201,792		$	148,214
Performance fees	—			9
Total revenues	$	201,792		$	148,223
Operating Expenses
Compensation and benefits
Salaries, incentive compensation and benefits	85,855			72,680
Pre-offering related compensation - share-based awards	23,637			333,231
Pre-offering related compensation - other	—			143,035
Total compensation and benefits	109,492			548,946
Distribution and marketing	11,174			8,176
Occupancy	2,686			2,616
Communication and technology	4,476			3,330
General and administrative	6,812			6,469
Total operating expenses	134,640			569,537
Total operating income (loss)	67,152			(421,314		)
Non-operating income (loss)
Interest expense	(2,883		)	(3,210		)
Net gain (loss) of Launch Equity	(598		)	4,779
Net gain on the valuation of contingent value rights	—			24,800
Other non-operating expense	(276		)	—
Total non-operating income (loss)	(3,757		)	26,369
Income (loss) before income taxes	63,395			(394,945		)
Provision for income taxes	11,208			4,449
Net income (loss) before noncontrolling interests	52,187			(399,394		)
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44,149			(407,123		)
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity	(598		)	4,779
Net income attributable to Artisan Partners Asset Management Inc.	$	8,636		$	2,950
	January 1, 2014 to March 31, 2014			March 12, 2013 to March 31, 2013
Earnings (loss) per share
Basic	$	(2.29	)	$	0.19
Diluted	$	(2.29	)	$	0.19
Weighted average number of common shares outstanding
Basic	20,214,242			12,728,949
Diluted	20,214,242			15,294,412
Dividends declared per Class A common share	$	2.18		$	—

The accompanying notes are an integral part of the consolidated financial statements.

2

ARTISAN PARTNERS ASSET MANAGEMENT INC. Unaudited Consolidated Statements of Comprehensive Income (Loss) (U.S. dollars in thousands)
	For the Three Months Ended March 31,
	2014			2013
Net income (loss) before noncontrolling interests	$	52,187		$	(399,394	)
Other comprehensive income (loss), net of tax
Unrealized gains on investment securities:
Unrealized holding gains on investment securities, net of tax of $86 and $39, respectively	21			1,854
Less: reclassification adjustment for gains (losses) included in net income	—			—
Net unrealized gains on investment securities	21			1,854
Foreign currency translation gain (loss)	53			(322		)
Total other comprehensive income	74			1,532
Comprehensive income (loss)	52,261			(397,862		)
Comprehensive income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44,019			(405,662		)
Comprehensive income (loss) attributable to noncontrolling interests - Launch Equity	(598		)	4,779
Comprehensive income attributable to Artisan Partners Asset Management Inc.	$	8,840		$	3,021

The accompanying notes are an integral part of the consolidated financial statements.

3

ARTISAN PARTNERS ASSET MANAGEMENT INC. Unaudited Consolidated Statements of Changes in Stockholders' Equity (U.S. dollars in thousands)
	Common stock			Convertible preferred stock			Additional paid-in capital			Retained earnings (deficit)			Accumulated other comprehensive income		Non-controlling interest - Artisan Partners Holdings			Non-controlling interest - Launch Equity			Total equity
Balance at December 31, 2013	$	703		$	34,909		$	6,388		$	1,401		$	378	$	38,060		$	50,472		$	132,311
Net income (loss)	—			—			—			8,636			—		44,149			(598		)	52,187
Other comprehensive income - foreign currency translation	—			—			—			—			13		40			—			53
Other comprehensive income - available for sale investments, net of tax	—			—			—			—			14		85			—			99
Cumulative impact of changes in ownership of Artisan Partners Holdings LP, net of tax	—			—			(3,456		)	—			177		3,201			—			(78		)
Capital contribution	—			—			—			—			—		—			1,825			1,825
Amortization of equity-based compensation	—			—			9,357			—			—		18,921			—			28,278
Deferred tax assets, net of amounts payable under tax receivable agreements	—			—			45,825			—			—		—			—			45,825
Issuance of Class A common stock, net of issuance costs	93			—			552,897			—			—		—			—			552,990
Purchase of convertible preferred stock and subsidiary equity	(85		)	(21,652		)	(533,204		)	—			—		812			—			(554,129		)
Distributions	—			—			—			—			—		(93,005		)	—			(93,005		)
Dividends	—			—			(12,322		)	(34,456		)	—		—			—			(46,778		)
Balance at March 31, 2014	$	711		$	13,257		$	65,485		$	(24,419	)	$	582	$	12,263		$	51,699		$	119,578

4

ARTISAN PARTNERS ASSET MANAGEMENT INC. Unaudited Consolidated Statements of Changes in Stockholders' Equity, continued (U.S. dollars in thousands)
	Common stock		Convertible preferred stock		Additional paid-in capital			Retained earnings (deficit)		Accumulated other comprehensive income		Non-controlling interest - Artisan Partners Holdings			Non-controlling interest - Launch Equity		Total equity			Redeemable Preferred Units
Balance at December 31, 2012	$	—	$	—	$	—		$	—	$	—	$	(709,414	)	$	36,699	$	(672,715	)	$	357,194
Net income (loss)	—		—		—			—		—		(434,342		)	—		(434,342		)	—
Other comprehensive income	—		—		—					—		1,065			—		1,065			—
Partnership distributions	—		—		—			—		—		(100,514		)	—		(100,514		)	—
Modification of equity award and other pre-offering related compensation	—		—		—			—		—		572,471			—		572,471			—
Modification of redeemable preferred units	—		—		—			—		—		357,194			—		357,194			(357,194		)
Initial establishment of contingent value right liability	—		—		—			—		—		(55,440		)	—		(55,440		)	—
Capital redemption	—		—		—			—		—		(16		)	—		(16		)	—
Balance at March 12, 2013	$	—	$	—	$	—		$	—	$	—	$	(368,996	)	$	36,699	$	(332,297	)	$	—
IPO proceeds	—		—		—			—		—		353,414			—		353,414			—
Attribution of noncontrolling interest	674		74,748		(58,365		)	—		3,029		(20,086		)	—		—			—
Redemption of partnership units	—		—		—			—		—		(76,319		)	—		(76,319		)	—
Net income (loss)	—		—		—			2,950		—		27,219			4,779		34,948			—
Other comprehensive income, net of tax	—		—		—			—		467		—			—		467			—
Capital contribution	—		—		—			—		—		—			3,050		3,050			—
Amortization of equity-based compensation	—		—		1,374			—		—		3,124			—		4,498			—
Establishment of deferred tax assets, net of amounts payable under tax receivable agreements	—		—		17,989			—		—		—			—		17,989			—
Balance at March 31, 2013	$	674	$	74,748	$	(39,002	)	$	2,950	$	3,496	$	(81,644	)	$	44,528	$	5,750		$	—

The accompanying notes are an integral part of the consolidated financial statements.

5

ARTISAN PARTNERS ASSET MANAGEMENT INC. Unaudited Consolidated Statements of Cash Flows (U.S. dollars in thousands)
	For the Three Months Ended March 31,
	2014			2013
Cash flows from operating activities
Net income (loss) before noncontrolling interests	$	52,187		$	(399,394	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	693			698
Deferred income taxes	2,540			2,646
Net gain on the valuation of contingent value rights	—			(24,800		)
(Gains) losses of Launch Equity, net	598			(4,779		)
Proceeds from sale of investments by Launch Equity	56,880			22,204
Purchase of investments by Launch Equity	(48,094		)	(22,109		)
Loss on disposal of property and equipment	5			1
Amortization of debt issuance costs	112			112
Share-based compensation	28,278			576,969
Change in assets and liabilities resulting in an increase (decrease) in cash:
Net change in operating assets and liabilities of Launch Equity	(10,611		)	(3,013		)
Accounts receivable	1,891			(5,459		)
Prepaid expenses and other assets	(1,442		)	(263		)
Accounts payable and accrued expenses	67,634			54,434
Class B liability awards	(3,459		)	(226,177		)
Deferred lease obligations	10			(71		)
Net cash provided by (used in) operating activities	147,222			(29,001		)
Cash flows from investing activities
Acquisition of property and equipment	(990		)	(455		)
Leasehold improvements	(949		)	(199		)
Proceeds from sale of property and equipment	4			—
Purchase of investment securities	(10,000		)	(2,000		)
Net cash used in investing activities	(11,935		)	(2,654		)
Cash flows from financing activities
Partnership distributions	(93,005		)	(100,530		)
Dividends paid	(46,778		)	—
Change in other liabilities	(16		)	(16		)
Repayment under revolving credit facility	—			(90,000		)
Net proceeds from issuance of common stock	554,129			356,579
Payment of costs directly associated with the issuance of Class A common stock	(781		)	(3,165		)
Purchase of preferred stock and subsidiary equity	(554,129		)	—
Purchase of Class A common units	—			(76,319		)
Capital invested into Launch Equity	1,825			3,050
Net cash provided by (used in) financing activities	(138,755		)	89,599
Net increase (decrease) in cash and cash equivalents	(3,468		)	57,944
Cash and cash equivalents
Beginning of period	211,839			141,159
End of period	$	208,371		$	199,103
Supplementary information
Noncash activity:
Issuance of preferred stock	$	—		$	74,748
Establishment of deferred tax assets	287,367			70,862
Establishment of amounts payable under tax receivable agreements	244,262			53,449
Establishment of contingent value rights	—			55,440

The accompanying notes are an integral part of the consolidated financial statements.

6

ARTISAN PARTNERS ASSET MANAGEMENT INC.

Notes to Unaudited Consolidated Financial Statements

(U.S. currencies in thousands, except per share or per unit amounts and as otherwise indicated)

Note 1. Organization and nature of business

Organization

On March 12, 2013, Artisan Partners Asset Management Inc. (“APAM”) completed its initial public offering (the “IPO”). APAM was formed in 2011 as a subsidiary of Artisan Partners Holdings LP (“Artisan Partners Holdings” or “Holdings”). APAM was formed for the purpose of becoming the general partner of Holdings in connection with the IPO. The reorganization (“IPO Reorganization”) established the necessary corporate structure to complete the IPO while at the same time preserving the ability of the firm to conduct operations through Holdings and its subsidiaries.

As part of the IPO Reorganization, APAM became the sole general partner of Holdings. As the sole general partner, APAM controls the business and affairs of Holdings. As a result, APAM consolidates Holdings’ financial statements and records a noncontrolling interest for the economic interests in Holdings held by the limited partners of Holdings. At March 31, 2014, APAM’s total economic interest in Holdings approximated 41% of Holdings’ economics.

Artisan Partners Asset Management has been allocated a part of Artisan Partners Holdings’ net income since March 12, 2013, when it became Artisan Partners Holdings’ general partner. APAM and its subsidiaries are hereafter referred to collectively as “Artisan” or the “Company”.

Nature of Business

Artisan is an investment management firm focused on providing high-value added, active investment strategies to sophisticated clients globally. Artisan’s operations are conducted through Artisan Partners Holdings and its subsidiaries.

Artisan has six autonomous investment teams that oversee fourteen distinct U.S., non-U.S. and global investment strategies. During the March quarter of 2014 Artisan launched its fourteenth investment strategy, the Artisan Partners High Income strategy, which is managed by the firm’s Credit team.

Each strategy is offered through multiple investment vehicles to accommodate a broad range of client mandates. Artisan offers its investment management services primarily to institutions and through intermediaries that operate with institutional-like decision-making processes and have long-term investment horizons.

2014 Follow-On Offering

On March 12, 2014, APAM completed a registered public offering of 9,284,337 shares of Class A common stock (the “2014 Follow-on Offering”) and utilized all of the net proceeds to purchase an aggregate of 6,284,337 common units and 2,256,883 preferred units of Artisan Partners Holdings and 743,117 shares of APAM’s convertible preferred stock, at a price per unit or share, as applicable, equal to $62.00 less the underwriting discount per share. The offering and subsequent purchase of shares and units had the following impact on the consolidated financial statements:

• APAM received 9,284,337 general partnership (“GP”) units of Holdings, and APAM’s ownership interest in Holdings increased from 29% to 41%. See Note 7, “Noncontrolling interest - Holdings” for the impact of the change in ownership.

• APAM’s purchase of common and preferred units of Holdings with a portion of the net proceeds resulted in an increase to deferred tax assets of approximately $287.4 million and an increase in amounts payable under tax receivable agreements of approximately $244.3 million.

• The purchase price of the convertible preferred stock exceeded its carrying value on APAM’s consolidated balance sheet by $22.7 million, which is considered a deemed dividend and is subtracted from net income to calculate income available to common stockholders in the calculation of earnings per share. The purchase of the preferred units of Holdings resulted in a similar deemed dividend, which reduced net income available to common stockholders by an additional $25.2 million in the calculation of earnings per share.

Note 2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying financial statements are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of such consolidated financial statements have been included. Such interim results are not necessarily indicative of full year results.

7

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting and accordingly they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. As a result, the interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in APAM’s latest annual report on Form 10-K.

The accompanying financial statements were prepared in accordance with U.S. GAAP and related rules and regulations of the SEC. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates or assumptions.

Because APAM and Holdings were under common control at the time of the IPO Reorganization, APAM’s acquisition of control of Holdings was accounted for as a transaction among entities under common control. The consolidated financial statements of APAM reflect the following:

• Statements of Financial Condition - The assets, liabilities and equity of Holdings and of APAM have been carried forward at their historical carrying values. The historical partners’ equity or deficit of Holdings is reflected as a noncontrolling interest.

• Statements of Operations, Comprehensive Income and Cash Flows - The historical consolidated statements of Holdings have been consolidated with the statements of operations, comprehensive income and cash flows of APAM.

Principles of consolidation

Artisan’s policy is to consolidate all subsidiaries or other entities in which it has a controlling financial interest and variable interest entities (“VIEs”) of which Artisan is deemed to be the primary beneficiary. The primary beneficiary is deemed to be the entity that has the power to govern the financial and operating policies of the subsidiary so as to obtain benefits from its activities. The consolidated financial statements include the accounts of APAM, all subsidiaries or other entities in which APAM has a direct or indirect controlling financial interest and VIEs of which Artisan is deemed to be the primary beneficiary. All material intercompany balances have been eliminated in consolidation.

Artisan’s wholly-owned subsidiary, Artisan Partners Alternative Investments GP LLC, is the general partner of Artisan Partners Launch Equity LP (“Launch Equity”), a private investment partnership that is considered a VIE. Launch Equity is considered an investment company and therefore is accounted for under ASC Topic 946, Financial Services – Investment Companies. Artisan has retained the specialized industry accounting principles of this investment company in its Consolidated Financial Statements. See Note 8, “Variable and Voting Interest Entities”for additional details.

The Company makes initial seed investments in sponsored investment portfolios at the portfolio’s formation. If the seed investment results in a controlling financial interest, APAM consolidates the investment, and the underlying individual securities are accounted for as trading securities. Seed investments in which the Company does not have a controlling financial interest are classified as available-for-sale investments. As of March 31, 2014, APAM does not have a controlling financial interest in any of its seed investments.

Recent accounting pronouncements

In March 2013, the FASB issued ASU 2013-05, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The ASU clarifies the interaction between ASC 810-10, Consolidation-Overall, and ASC 830-30, Foreign Currency Matters-Translation of Financial Statements, when releasing the cumulative translation adjustment into net income when a parent either sells a part or all of its investment ina foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU was adopted prospectively on January 1, 2014 and did not have an impact on the Company’s consolidated financial statements.

In June 2013, the FASB issued ASU 2013-08, Investment Companies (Topic 946). The ASU changes the approach to the investment company assessment in Topic 946, clarifying the characteristics of an investment company and provides comprehensive guidance for assessing whether an entity is an investment company. This update would also require an investment company to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting and to include additional disclosures. The ASU was adopted prospectively on January 1, 2014 and did not have an impact on the Company’s consolidated financial statements.

8

Note 3. Investment Securities

The disclosures below include details of Artisan’s investments. Investments held by Launch Equity are described in Note 8, “Variable and Voting Interest Entities”.

	Cost		Unrealized Gains		Unrealized Losses		Fair Value
At March 31, 2014
Mutual funds	$	16,190	$	1,721	$	—	$	17,911
At December 31, 2013
Mutual funds	$	6,190	$	1,614	$	—	$	7,804

Artisan’s investments in mutual funds consist of investments in shares of Artisan Partners Funds, Inc. and Artisan Partners Global Funds plc and are considered to be available-for-sale securities. As a result, unrealized gains (losses) are recorded to other comprehensive income (loss). During the three months ended March 31, 2014, Artisan made an investment of $10.0 million in Artisan Partners High Income Fund.

As of March 31, 2014 and December 31, 2013, Artisan held no available-for-sale securities in an unrealized loss position.

Note 4. Fair Value Measurements

The table below presents information about Artisan’s assets and liabilities that are measured at fair value and the valuation techniques Artisan utilized to determine such fair value. The fair value of financial instruments held by Launch Equity is presented in Note 8, “Variable and Voting Interest Entities”. In accordance with ASC 820, fair value is defined as the price that Artisan would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. The following three-tier fair value hierarchy prioritizes the inputs used in measuring fair value:

• Level 1 – Observable inputs such as quoted (unadjusted) market prices in active markets for identical securities.

• Level 2 – Other significant observable inputs (including but not limited to quoted prices for similar instruments, interest rates, prepayment speeds, credit risk, etc.).

• Level 3—Significant unobservable inputs (including Artisan’s own assumptions in determining fair value).

The following provides the hierarchy of inputs used to derive fair value of Artisan’s assets and liabilities that are financial instruments as of March 31, 2014 and December 31, 2013:

	Assets and Liabilities at Fair Value
	Total		Level 1		Level 2		Level 3
March 31, 2014
Assets
Cash equivalents	$	60,002	$	60,002	$	—	$	—
Mutual funds	17,911		17,911		—		—
December 31, 2013
Assets
Cash equivalents	$	105,001	$	105,001	$	—	$	—
Equity mutual funds	7,804		7,804		—		—

Fair values determined based on Level 1 inputs utilize quoted market prices for identical assets. Level 1 assets generally consist of money market accounts, marketable open-end mutual funds or UCITS. There were no Level 2 or Level 3 assets or liabilities recorded at fair value as of March 31, 2014 and December 31, 2013.

Artisan’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no transfers between Level 1, Level 2 or Level 3 securities during the three months ended March 31, 2014 and 2013.

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Note 5. Borrowings

Artisan’s borrowings consist of the following as of March 31, 2014 and December 31, 2013:

	Maturity	Outstanding Balance		Interest Rate Per Annum
Revolving credit agreement	August 2017	—		NA
Senior notes
Series A	August 2017	60,000		4.98	%
Series B	August 2019	50,000		5.32	%
Series C	August 2022	90,000		5.82	%
Total borrowings		$	200,000

The fair value of borrowings was approximately $201.6 millionas of March 31, 2014. Fair value was determined based on future cash flows, discounted to present value using current market interest rates. The inputs are categorized as Level 2 in the fair value hierarchy, as defined in Note 4, “Fair Value Measurements”.

Interest expense incurred on the unsecured notes and revolving credit agreement was $2.8 million and $3.1 million for the three months ended March 31, 2014 and 2013, respectively.

As of March 31, 2014, the aggregate maturities of debt obligations, based on their contractual terms, are as follows:

2014	$	—
2015	—
2016	—
2017	60,000
Thereafter	140,000
	$	200,000

Note 6. Derivative Instruments

Contingent Value Rights (“CVRs”)

As part of the IPO Reorganization, Holdings issued Partnership CVRs and APAM issued APAM CVRs to the holders of Holdings’ preferred units and APAM’s convertible preferred stock, respectively. APAM held one Partnership CVR for each APAM CVR outstanding. On November 6, 2013, the CVRs were terminated with no amounts paid or payable by Artisan.

The CVRs were considered derivative instruments under ASC 815, Derivatives and Hedging, and accordingly were recorded as a liability at fair value on the balance sheet until they were terminated. Changes in the fair value of these derivative instruments have been recorded in earnings as a net gain (loss) on the valuation of contingent value rights in the period of change. The following table presents gains (losses) recognized on derivative instruments for the three months ended March 31, 2014 and 2013:

		Three months ended March 31,
		2014				2013
	Income Statement Classification	Gains		Losses		Gains		Losses
Contingent value rights	Net gain on the valuation of contingent value rights	$	—	$	—	$	24,800	$	—
Total		$	—	$	—	$	24,800	$	—

Note 7. Noncontrolling interest - Holdings

Holdings is the predecessor of APAM for accounting purposes, and its consolidated financial statements are Artisan’s historical financial statements for periods prior to March 12, 2013, the date on which APAM became the general partner of Holdings.

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As of March 31, 2014, APAM held approximately 41% of the economic interests in Holdings. Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings in the Unaudited Consolidated Statements of Operations represents the portion of earnings or loss attributable to the economic interests in Holdings held by the limited partners of Holdings. All income for the period prior to March 12, 2013, is entirely attributable to noncontrolling interests.

During the three months ended March 31, 2014, APAM’s ownership interest in Holdings increased due to (i) the issuance of 41,812 Holdings’ GP units corresponding to 41,812 restricted shares of Class A common stock issued by APAM during the period, (ii) the issuance of 9,284,337 Holdings’ GP units corresponding to the 9,284,337 shares of Class A common stock issued during the period and (iii) APAM’s purchase and cancellation of 6,284,337 common units and 3,000,000 preferred units of Holdings. Since APAM continues to have a controlling interest in Holdings, changes in ownership of Holdings are accounted for as equity transactions. Additional paid-in capital and Noncontrolling interest - Artisan Partners Holdings in the Unaudited Condensed Consolidated Statements of Financial Condition are adjusted to reallocate Holdings’ historical equity to reflect the change in APAM’s ownership of Holdings.

As a result of the change in ownership, a deficit of $3.5 million was transferred to Additional paid-in capital from Noncontrolling interests - Artisan Partners Holdings. Additionally, Accumulated other comprehensive income was adjusted to reflect the change in ownership interest through a $0.3 million reduction to Noncontrolling interest and a $0.2 million increase to accumulated other comprehensive income, net of tax. The increased ownership level also resulted in a $2.1 million increase in deferred tax assets and Additional paid-in-capital. The impact of the change in APAM’s ownership interests in Holdings is reflected in the Unaudited Consolidated Statement of Changes in Stockholders’ Equity.

Note 8. Variable and Voting Interest Entities

Artisan Funds and Artisan Global Funds

Artisan serves as the investment adviser for Artisan Partners Funds, Inc. (“Artisan Funds”), a family of mutual funds registered with the SEC under the Investment Company Act of 1940, and Artisan Partners Global Funds plc (“Artisan Global Funds”), a family of Ireland-based UCITS. Artisan Funds and Artisan Global Funds are corporate entities the business and affairs of which are managed by their respective boards of directors. The shareholders of the funds retain all voting rights, including the right to elect and reelect members of their respective boards of directors. As a result, each of these entities is a voting interest entity (“VOE”). While Artisan holds, in limited cases, direct investments in a fund (which are made on the same terms as are available to other investors and do not represent a majority voting interest in any fund), Artisan does not have a controlling financial interest or a majority voting interest and, as such, does not consolidate these entities.

Artisan Partners Launch Equity LP

Artisan serves as the investment adviser for Launch Equity, a private investment partnership which seeks to achieve returns primarily through capital appreciation, while also mitigating market risk through the use of hedging strategies. Artisan receives management fees as compensation for services provided as the investment adviser. Artisan also maintains, through Artisan Partners Alternative Investments GP LLC, a direct equity investment in the fund and receives an allocation of profits based upon Launch Equity’s net capital appreciation during a fiscal year. Each of these represents a variable interest in the fund.

The limited partners of Launch Equity are certain current or former Artisan employees and are considered related parties. Artisan has determined that Launch Equity is a VIE as (a) the voting rights of the limited partners are not proportional to their obligations to absorb expected losses and rights to receive expected residual returns and (b) substantially all of Launch Equity’s activities either involve or are conducted on behalf of the limited partners (the investors that have disproportionately few voting rights) and their related parties (including Artisan).

Launch Equity qualifies for deferral of the current consolidation guidance for VIEs; therefore the consolidation assessment is based on previous consolidation guidance. This guidance requires an analysis of which party, through holding interests directly or indirectly in the entity or contractually through other variable interests, such as management fees and incentive allocations, would absorb a majority of the expected variability of the entity. In determining whether Artisan is the primary beneficiary of Launch Equity, both qualitative and quantitative factors such as voting rights of the equity holders, economic participation of all parties, including how fees are earned, related party ownership and the level of involvement Artisan had in the design of the VIE, were considered. It was concluded that Artisan was the primary beneficiary as the related party group absorbs a majority of the variability associated with Launch Equity and Artisan is the member within the related party group that is most closely associated with the VIE. Although Artisan has only a minimal equity investment in Launch Equity, as the general partner, controls Launch Equity’s management and affairs.

In addition, the fund was designed to attract third party investors to provide an economic benefit to Artisan in the form of quarterly management fees and an annual incentive allocation based upon the net capital appreciation of the fund. Also, in the ordinary course of business, Artisan may choose to waive certain fees, its incentive allocation or assume operating expenses of the fund. As a result, it was concluded that Artisan is the primary beneficiary of Launch Equity and its results are included in Artisan’s consolidated financial statements.

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Artisan’s maximum exposure to loss from its involvement with Launch Equity is limited to its equity investment of $1 thousand while the potential benefit is limited to the management and incentive fees received as investment adviser. Therefore, the gains or losses of Launch Equity have not had a significant impact on Artisan’s results of operations, liquidity or capital resources. Artisan has no right to the benefits from, nor does it bear the risks associated with, Launch Equity’s investments, beyond Artisan’s minimal direct investment in Launch Equity. If Artisan were to liquidate, the assets of Launch Equity would not be available to its general creditors and as a result, Artisan does not consider investments held by Launch Equity to be Artisan’s assets.

The following tables reflect the impact of consolidating Launch Equity’s assets and liabilities into the Consolidated Statement of Financial Condition as of March 31, 2014 and December 31, 2013 and results into the Consolidated Statement of Operations for the three months ended March 31, 2014 and 2013.

Condensed Consolidating Statements of Financial Condition
	As of March 31, 2014									As of December 31, 2013
	Before Consolidation		Launch Equity		Eliminations			As Reported		Before Consolidation		Launch Equity		Eliminations			As Reported
Cash and cash equivalents	$	208,371	$	—	$	—		$	208,371	$	211,839	$	—	$	—		$	211,839
Cash and cash equivalents of Launch Equity	—		30,263		—			30,263		—		19,156		—			19,156
Accounts receivable	62,219		—		—			62,219		64,110		—		—			64,110
Accounts receivable of Launch Equity	—		—		—			—		—		7,428		—			7,428
Investment securities of Launch Equity	1		60,528		(1		)	60,528		1		63,364		(1		)	63,364
Other assets	515,747		—		—			515,747		215,501		—		—			215,501
Total assets	$	786,338	$	90,791	$	(1	)	$	877,128	$	491,451	$	89,948	$	(1	)	$	581,398
Accounts payable of Launch Equity	$	—	$	869	$	—		$	869	$	—	$	7,485	$	—		$	7,485
Securities sold, not yet purchased of Launch Equity	—		38,222		—			38,222		—		31,990		—			31,990
Other liabilities	718,459		—		—			718,459		409,612		—		—			409,612
Total liabilities	718,459		39,091		—			757,550		409,612		39,475		—			449,087
Total stockholders’ equity	55,616		—		—			55,616		43,779		—		—			43,779
Noncontrolling interest - Artisan Partners Holdings	12,263		1		(1		)	12,263		38,060		1		(1		)	38,060
Noncontrolling interest - Launch Equity	—		51,699		—			51,699		—		50,472		—			50,472
Total equity	67,879		51,700		(1		)	119,578		81,839		50,473		(1		)	132,311
Total liabilities and equity	$	786,338	$	90,791	$	(1	)	$	877,128	$	491,451	$	89,948	$	(1	)	$	581,398

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Condensed Consolidating Statements of Operations
	Three Months Ended
	March 31, 2014												March 31, 2013
	Before Consolidation			Launch Equity			Eliminations			As Reported			Before Consolidation			Launch Equity		Eliminations			As Reported
Total revenues	$	201,917		$	—		$	(125	)	$	201,792		$	148,327		$	—	$	(104	)	$	148,223
Total operating expenses	134,765			—			(125		)	134,640			569,641			—		(104		)	569,537
Operating income (loss)	67,152			—			—			67,152			(421,314		)	—		—			(421,314		)
Non-operating income (loss)	(3,159		)	—			—			(3,159		)	21,590			—		—			21,590
Net gain (loss) of Launch Equity	—			(598		)	—			(598		)	—			4,779		—			4,779
Total non-operating income (loss)	(3,159		)	(598		)	—			(3,757		)	21,590			4,779		—			26,369
Income (loss) before income taxes	63,993			(598		)	—			63,395			(399,724		)	4,779		—			(394,945		)
Provision for income taxes	11,208			—			—			11,208			4,449			—		—			4,449
Net income (loss)	52,785			(598		)	—			52,187			(404,173		)	4,779		—			(399,394		)
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44,149			—			—			44,149			(407,123		)	—		—			(407,123		)
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity	—			(598		)	—			(598		)	—			4,779		—			4,779
Net income attributable to Artisan Partners Asset Management Inc.	$	8,636		$	—		$	—		$	8,636		$	2,950		$	—	$	—		$	2,950

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The carrying value of Launch Equity’s consolidated investments is also their fair value. Short and long positions on investment securities are valued based upon closing market prices of the security on the principal exchange on which they are traded. Investments in investment companies are valued at their respective net asset values on the valuation date. Short-term investments, other than repurchase agreements, maturing within sixty days from the valuation date are valued at amortized cost, which approximates market value. The following table presents the fair value hierarchy levels of investments and liabilities held by Launch Equity which are measured at fair value as of March 31, 2014 and December 31, 2013:

	Assets and Liabilities at Fair Value:
	Total		Level 1		Level 2		Level 3
March 31, 2014
Assets
Investment securities – long position	$	60,528	$	60,528	$	—	$	—
Liabilities
Investment securities – short position	$	38,222	$	38,222	$	—	$	—
December 31, 2013
Assets
Investment securities – long position	$	63,364	$	63,364	$	—	$	—
Liabilities
Investment securities – short position	$	31,990	$	31,990	$	—	$	—

Note 9. Stockholders' Equity

APAM - Stockholders’ Equity

As of March 31, 2014 and December 31, 2013, APAM had the following authorized and outstanding equity:

		Outstanding
	Authorized	March 31, 2014	December 31, 2013	Voting Rights (1)	Economic Rights(2)
Common shares
Class A, par value $0.01 per share	500,000,000	29,133,585	19,807,436	1 vote per share	Proportionate
Class B, par value $0.01 per share	200,000,000	21,566,436	25,271,889	5 votes per share	None
Class C, par value $0.01 per share	400,000,000	20,370,787	25,206,554	1 vote per share	None
Preferred shares
Convertible preferred, par value $0.01 per share	15,000,000	455,011	1,198,128	1 vote per share	Proportionate
(1) Each of the Company’s employees to whom Artisan has granted equity have entered into a stockholders agreement with respect to all shares of APAM common stock they have acquired from the Company and any shares they may acquire from the Company in the future, pursuant to which they granted an irrevocable voting proxy to a Stockholders Committee. As of March 31, 2014, Artisan’s employees held 1,616,969 shares of Class A common stock subject to the agreement and all 21,566,436 outstanding shares of Class B common stock.
(2) The holders of preferred units of Holdings are entitled to preferential distributions in the case of a partial capital event or upon dissolution of Holdings. In the case of any distributions on the preferred units, prior to paying any dividends on the Class A common stock, APAM must pay the holders of convertible preferred stock a dividend equal to the distribution APAM received in respect of the preferred units it holds, net of taxes, if any.

APAM is dependent on cash generated by Holdings to fund any dividends. Generally, Holdings will make distributions to all of its partners, including APAM, based on the proportionate ownership each holds in Holdings. APAM will fund dividends to its stockholders from its proportionate share of those distributions after provision for its taxes and other obligations. During the three months ended March 31, 2014, APAM paid a dividend of $2.18 per share of outstanding Class A common stock and $3.00 per share of outstanding convertible preferred stock.

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Class A Common Stock

During the three months ended March 31, 2014, APAM issued 9,326,149shares of Class A common stock, in connection with the 2014 Follow-on Offering and restricted share awards granted during the quarter. APAM also granted a total of 6,970 restricted stock units with respect to Class A common stock to non-employee directors.

Each Class A, Class B, Class D and Class E unit of Holdings (together with the corresponding share of Class B or Class C common stock) is exchangeable for one share of Class A common stock. The preferred units of Holdings (together with the corresponding shares of Class C common stock) are also exchangeable for Class A common stock generally on a one-for-one basis, though in certain circumstances on a less than a one-for-one basis. APAM’s convertible preferred stock is convertible into Class A common stock generally on a one-for-one basis, though in certain circumstances on a less than one-for-one basis. During the three months endedMarch 31, 2014, there were no exchanges of units or conversions of convertible preferred stock.

Class B Common Stock

In 2013, APAM issued shares of Class B common stock to employee-partners in amounts equal to the number of Class B common units those individuals held in Holdings. Upon termination of employment with Artisan, an employee-partner’s vested Class B common units are automatically exchanged for Class E common units; unvested Class B common units are forfeited. The employee-partner’s shares of Class B common stock are canceled and APAM issues the former employee-partner a number of shares of Class C common stock equal to the former employee-partner’s number of Class E common units. The former employee-partner’s Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings. As part of the 2014 Follow-on Offering, APAM canceled 3,705,453 shares of Class B common stock corresponding to the Class B common units APAM purchased.

Class C Common Stock

In 2013, APAM issued shares of Class C common stock to certain investors in Holdings in amounts equal to the number of units the investors held in Holdings. As part of the 2014 Follow-on Offering, APAM canceled 4,835,767 shares of Class C common stock corresponding to the Class A, D, and E common units and the preferred units APAM purchased.

Convertible Preferred Stock

APAM issued shares of convertible preferred stock in 2013. When the holders of APAM convertible preferred stock are no longer entitled to preferential distributions, all shares of convertible preferred stock will automatically convert into shares of Class A common stock at the conversion rate plus cash in lieu of fractional shares. As part of the March 2014 Follow-on Offering, APAM purchased 743,117 shares of convertible preferred stock and immediately canceled the shares.

Artisan Partners Holdings - Partners’ Equity

Prior to the IPO Reorganization, Holdings was a private company. Holdings has several outstanding classes of partnership units held by investors.

Holdings makes distributions of its net income to the holders of its partnership units for income taxes as required under the terms of the partnership agreement and also makes additional distributions of its net income under the terms of the partnership agreement. The distributions are recorded in the financial statements on the declaration date, or on the payment date in lieu of a declaration date.

Holdings’ partnership distributions totaled $131.6 million and $166.2 million for the three months ended March 31, 2014 and 2013, respectively. The portion of these distributions made prior to the IPO to the holders of Class B common units (which were classified as liability awards prior to the IPO) are reflected as compensation and benefits expense within the Consolidated Statements of Operations and totaled $65.7 million for the three months ended March 31, 2013. The portion of these distributions made prior to the IPO to the other partners of Holdings and, after the IPO, to all partners are recorded to total stockholders’ equity, with the exception of the portion of distributions made to APAM, the general partner of Holdings. Holdings distributions to APAM totaled $38.6 million for the three months ended March 31, 2014.

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Note 10. Compensation and Benefits

	For the Three Months Ended March 31,
	2014		2013
Salaries, incentive compensation and benefits (1)	$	81,597	$	72,680
Restricted share compensation expense	4,258		—
Total salaries, incentive compensation and benefits	85,855		72,680
Pre-offering related compensation - share-based awards	23,637		333,231
Pre-offering related compensation - other	—		143,035
Total compensation and benefits	$	109,492	$	548,946
(1) Excluding restricted share compensation expense

Incentive compensation

Cash incentive compensation paid to members of Artisan’s portfolio management teams and members of its marketing and client service teams is based on a formula that is tied directly to revenues. These payments are made in the quarter following the quarter in which the incentive was earned with the exception of fourth quarter payments which are paid in the fourth quarter of the year. Cash incentive compensation paid to most other employees is discretionary and subjectively determined based on individual performance and Artisan’s overall results during the applicable year and has historically been paid in the fourth quarter of the year.

Restricted shares

Pursuant to the 2013 Omnibus Incentive Compensation Plan, Artisan has issued restricted shares of Class A common stock to its employees and employees of its subsidiaries. The shares vest on a pro rata basis over five years. Unvested shares are subject to forfeiture upon termination of employment. Grantees receiving the awards are entitled to dividends on unvested and vested shares.

Compensation expense related to the restricted shares is recognized based on the estimated grant date fair value, for only those awards expected to vest, on a straight-line basis over the requisite service period of the award. The Company estimated the number of awards expected to vest based, in part, on historical forfeiture rates and also based on management’s expectations of employee turnover. Forfeitures are estimated at the time of grant and revised in subsequent periods, if necessary, based on actual forfeiture activity.

The following table summarizes the restricted share activity for the three months ended March 31, 2014:

	Weighted-Average Grant Date Fair Value		Number of Awards
Unvested at December 31, 2013	$	52.36	1,575,157
Granted	$	71.59	41,812
Forfeited	—		—
Vested	—		—
Unvested at March 31, 2014	$	52.85	1,616,969

Compensation expense recognized related to the restricted shares was $4.3 million for the three months ended March 31, 2014. The unrecognized compensation expense for the unvested restricted shares as of March 31, 2014 was $70.5 million with a weighted average recognition period of 4.4 years remaining.

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Pre-offering related compensation consists of the following:

	For the Three Months Ended March 31,
	2014		2013
Change in value of Class B liability awards	$	—	$	41,942
Class B award modification expense	—		287,292
Amortization expense on pre-offering Class B awards	23,637		3,997
Pre-offering related compensation - share-based awards	23,637		333,231
Pre-offering related cash incentive compensation	—		56,788
Pre-offering related bonus make-whole compensation	—		20,520
Distributions on Class B liability awards	—		65,727
Pre-offering related compensation - other	—		143,035
Total pre-offering related compensation	$	23,637	$	476,266

Pre-offering related compensation - share-based awards

Historical Class B share-based awards

Holdings historically granted Class B share-based awards to certain employees. These awards vested over a period of five years. Prior to the IPO, all vested Class B awards were subject to mandatory redemption on termination of employment for any reason and were reflected as liabilities measured at fair value; unvested Class B awards were forfeited on termination of employment. The vested Class B liability awards of a terminated employee were historically redeemed in cash in annual installments, generally over the five years following termination of employment. The change in value of Class B liability awards and distributions to Class B limited partners were treated as compensation expense.

Historical redemption of Class B awards

Holdings historically redeemed the Class B awards of partners whose employment was terminated. The redemption value of the awards was determined in accordance with the terms of the grant agreement pursuant to which the award was granted. The Class B awards of partners whose services to Holdings terminated prior to the IPO will be redeemed for payments totaling $19.6 million and $23.0 million as of March 31, 2014 and December 31, 2013, respectively. Payments of $3.4 million were made for the three months ended March 31, 2014.

Modification of Class B share-based awards

As a part of the IPO Reorganization, the Class B grant agreements were amended to eliminate the cash redemption feature. The amendment is considered a modification under ASC 718 and the Class B awards have been classified as equity awards since such modification. As a result of the modification, Artisan recognized a non-recurring expense of $287.3 million based on the elimination of the redemption feature associated with the Class B awards recorded as the difference between the fair value and carrying value of the liability associated with the vested Class B common units immediately prior to the IPO. For any unvested Class B awards, Artisan will recognize recurring non-cash compensation charges over the remaining vesting period.

The following table summarizes the activity related to unvested Class B awards for the three months ended March 31, 2014:

	Weighted-Average Grant Date Fair Value		Number of Class B Awards
Unvested Class B awards at January 1, 2014	$	30.00	7,249,842
Granted	—		—
Forfeited	—		—
Vested	$	30.00	(666,878	)
Unvested at March 31, 2014	$	30.00	6,582,964

The unrecognized compensation expense for the unvested Class B awards as of March 31, 2014 was $128.2 million with a weighted average recognition period of 2.8 years remaining.

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Upon termination of employment with Artisan, an employee-partner’s vested Class B common units are automatically exchanged for Class E common units; unvested Class B common units are forfeited. The employee-partner’s shares of Class B common stock are canceled and APAM issues the former employee-partner a number of shares of Class C common stock equal to the former employee-partner’s number of Class E common units. The former employee-partner’s Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings.

Pre-offering related compensation - other

During the three months ended March 31, 2013, Artisan also incurred pre-offering related compensation charges of $56.8 million to pay cash incentive compensation to certain portfolio managers and $20.5 million representing profits after the IPO otherwise allocable and distributable, in the aggregate, to Holdings’ pre-IPO non-employee partners that instead was allocated and distributed to certain employee-partners. For the period between January 1, 2013 and the IPO, profits distributions totaling $65.7 million were made to Class B partners.

Note 11. Income Taxes and Related Payments

APAM is subject to U.S. federal and state income taxation on APAM’s allocable portion of the income of Holdings. APAM’s effective income tax rate was lower than the U.S. Federal statutory rate of 35% primarily due to a rate benefit attributable to the fact that approximately 62% of Holdings’ earnings are not subject to corporate level taxes. This favorable impact is partially offset by the impact of certain permanent items, primarily attributable to certain compensation related expenses that are not deductible for tax purposes. Prior to the IPO Reorganization, none of Holdings’ earnings were subject to U.S. corporate-level taxes.

In connection with the IPO, APAM entered into two tax receivable agreements (“TRAs”). Under the first TRA, APAM generally is required to pay to a private equity fund controlled by Hellman & Friedman LLC 85% of the applicable cash savings, if any, in U.S. federal and state income tax that APAM actually realizes (or is deemed to realize in certain circumstances) as a result of (i) the tax attributes of the preferred units APAM acquired in the merger of a wholly-owned subsidiary of the private equity fund into APAM in March 2013 (the “H&F Corp Merger”), (ii) net operating losses available as a result of the merger and (iii) tax benefits related to imputed interest.

Under the second TRA, APAM generally is required to pay to the holders of limited partnership units of Holdings 85% of the applicable cash savings, if any, in U.S. federal and state income tax that APAM actually realizes (or is deemed to realize in certain circumstances) as a result of (i) certain tax attributes of their units sold to APAM or exchanged (for shares of Class A common stock or convertible preferred stock) and that are created as a result of the sales or exchanges and payments under the TRAs and (ii) tax benefits related to imputed interest. Under both agreements, APAM generally will retain the benefit of the remaining 15% of the applicable tax savings.

For purposes of the TRAs, cash savings in tax are calculated by comparing APAM’s actual income tax liability to the amount it would have been required to pay had it not been able to utilize any of the tax benefits subject to the TRAs, unless certain assumptions apply. The TRAs will continue in effect until all such tax benefits have been utilized or expired, unless APAM exercises its right to terminate the agreements or payments under the agreements are accelerated in the event that APAM materially breaches any of its material obligations under the agreements. The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of exchanges by the holders of limited partnership units, the price of the Class A common stock or the value of the convertible preferred stock, as the case may be, at the time of the exchange, whether such exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest.

Payments under the TRAs, if any, will be made pro rata among all TRA counterparties entitled to payments on an annual basis to the extent APAM has sufficient taxable income to utilize the increased depreciation and amortization charges. Artisan expects to make payments under the TRAs, to the extent they are required, within 125 days after APAM’s federal income tax return is filed for each fiscal year. Interest on such payments will begin to accrue at a rate equal to one-year LIBOR plus 100 basis points from the due date (without extension) of such tax return.

The 2014 Follow-on Offering resulted in an increase to deferred tax assets and amounts payable under the TRA of $287.4 million and $244.3 million, respectively. As of March 31, 2014, the deferred tax asset and amounts payable related to the TRA were $468.4 million and $405.2 million. respectively. No amounts were paid under the TRAs during the three months ended March 31, 2014.

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Components of the provision for income taxes consist of the following:

	For the Three Months Ended March 31,
	2014			2013
Current:
Federal	$	7,610		$	1,177
State and local	981			544
Foreign	77			82
Total	8,668			1,803
Deferred:
Federal	2,776			2,588
State and local	(236		)	58
Total	2,540			2,646
Income tax expense	$	11,208		$	4,449

Net deferred tax assets comprise the following:

	As of March 31, 2014		As of December 31, 2013
Deferred tax assets:
Amortizable basis (1)	$	468,440	$	183,858
Other (2)	6,349		4,049
Total deferred tax assets	474,789		187,907
Less: valuation allowance (3)	—		—
Net deferred tax assets	$	474,789	$	187,907
(1) Represents the unamortized step-up of tax basis from the H&F Corp Merger and the purchase of common and preferred units by APAM.
(2) Represents the net deferred tax assets associated with the H&F Corp Merger and other miscellaneous deferred tax assets.
(3) Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.

Accounting standards establish a minimum threshold for recognizing, and a system for measuring, the benefits of income tax return positions in financial statements. There were no uncertain tax positions recorded as of March 31, 2014 and December 31, 2013.

In the normal course of business, Artisan is subject to examination by federal and certain state, local and foreign tax regulators. As of March 31, 2014, U.S. federal income tax returns for the years 2010 through 2013 are open and therefore subject to examination. State and local tax returns are generally subject to audit from 2009 to 2013. Foreign tax returns are generally subject to audit from 2010 to 2013.

Note 12. Accumulated Other Comprehensive Income (loss)

Accumulated other comprehensive income (loss), net of tax, in the accompanying Condensed Consolidated Statements of Financial Condition represents the portion of accumulated other comprehensive income attributable to APAM, and consists of the

following:

	As of March 31, 2014		As of December 31, 2013
Unrealized gain on investments	$	455	$	303
Foreign currency translation	127		75
Accumulated Other Comprehensive Income (Loss)	$	582	$	378

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Comprehensive income (loss) attributable to noncontrolling interests - Artisan Partners Holdings in the Consolidated Statements of Comprehensive Income (Loss) represents the portion of comprehensive income (loss) attributable to the economic interests in Holdings held by the limited partners of Holdings. For periods prior to the IPO, all comprehensive income (loss) is entirely attributable to noncontrolling interests.

Note 13. Earnings Per Share

Basic earnings per share is computed by dividing income available to Class A common stockholders by the weighted average number of Class A common shares outstanding during the period. Unvested restricted shares are excluded from the number of Class A common shares outstanding for the basic earnings per share calculation because the shares have not yet been earned by the employees. Income available to Class A common stockholders is computed by reducing net income attributable to APAM by dividends declared or paid to convertible preferred stockholders during the period and earnings (distributed and undistributed) allocated to participating securities, according to their respective rights to participate in those earnings. All income for the period prior to the IPO was entirely allocable to noncontrolling interest. As a result, only net income allocable to APAM from the period subsequent to the IPO is included in net income (loss) available to Class A common stockholders for the period ended March 31, 2013.

As described in Note 1, “Organization and nature of business” the consideration Artisan paid to purchase shares of its convertible preferred stock in connection with the 2014 Follow-on Offering exceeded the carrying amount of the shares of convertible preferred stock on Artisan’s consolidated balance sheet by $22.7 million, which is subtracted from net income as a deemed dividend to arrive at income available to common stockholders in the earnings per share calculation. The purchase of subsidiary preferred equity in connection with the 2014 Follow-on Offering resulted in a similar deemed dividend, which reduced net income available to common stockholders by an additional $25.2 million in the calculation of earnings per share.

Diluted earnings per share is computed by increasing the denominator by the amount of additional Class A common shares that would have been outstanding if all potential Class A common shares had been issued. Potential dilutive Class A common shares consist of (1) the Class A common shares issuable upon exchange of Holdings’ limited partnership units (together with the corresponding shares of APAM Class B or C common stock) for APAM Class A common stock, (2) the Class A common shares issuable upon conversion of APAM convertible preferred stock into APAM Class A common stock and (3) unvested restricted shares of Class A common stock.

At March 31, 2014 and 2013, there were 41,937,223 and 54,713,763, respectively, limited partnership units of Holdings outstanding exchangeable, as of March 12, 2014, for up to 41,937,223 and 54,713,763 shares, respectively, of APAM’s Class A common stock. Such units/shares were not included in the calculation of diluted net income (loss) per common share because the effect would have been anti-dilutive. For the three months ended March 31, 2014, a net loss was allocable to common stockholders. As a result, 1,616,969 shares of unvested restricted stock and 455,011 shares of convertible preferred stock and the net income allocated to those shares were excluded from the diluted earnings per share calculation because their effect would have been anti-dilutive.

At March 31, 2013, 2,565,463 shares of APAM convertible preferred stock were determined to be dilutive and are included in the diluted earnings per share calculation. The dilutive effect of outstanding convertible preferred stock is reflected in diluted earnings per share by application of the if-converted method.

The computation of weighted average common shares outstanding considers the outstanding shares of Class A common stock from January 1, 2014 through March 31, 2014 and March 12, 2013 through March 31, 2013, for the respective periods. The Class B and Class C common shares do not share in profits of APAM and therefore are not reflected.

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The computation of basic and diluted earnings per share for the periods ended March 31, 2014 and 2013 were as follows:

Basic and Diluted Earnings Per Share	For the Three Months Ended March 31, 2014			For the Period from March 12, 2013 to March 31, 2013
Numerator:
Net income (loss) allocable to APAM	$	8,636		$	2,950
Less: Convertible preferred stock deemed dividends	(22,694		)	—
Less: Subsidiary preferred equity deemed dividends	(25,155		)	—
Less: Allocation to participating securities	(6,980		)	(495		)
Net income (loss) allocable to common stockholders	$	(46,193	)	$	2,455
Denominator:
Weighted average shares outstanding - basic	20,214,242			12,728,949
Effect of dilutive securities	—			2,565,463
Weighted average shares outstanding - diluted	20,214,242			15,294,412
Earnings (loss) per share - basic and diluted	$	(2.29	)	$	0.19

Note 14. Indemnifications

In the normal course of business, APAM enters into agreements that include indemnities in favor of third parties. Holdings has also agreed to indemnify APAM as its general partner, Artisan Investment Corporation (“AIC”) as its former general partner, the directors and officers of APAM, the directors and officers of AIC as its former general partner, the members of its former Advisory Committee, and its partners, directors, officers, employees and agents. Holdings’ subsidiaries may also have similar agreements to indemnify their respective general partner(s), directors, officers, directors and officers of their general partner(s), partners, members, employees, and agents. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against us that have not yet occurred. APAM maintains insurance policies that may provide coverage against certain claims under these indemnities.

Note 15. Related Party Transactions

Artisan engages in transactions with its affiliates in the ordinary course of business.

Affiliate transactions—Artisan Funds

Artisan has agreements to serve as the investment manager of Artisan Funds, with which certain of Artisan employees are affiliated. Under the terms of these agreements, which are generally reviewed and continued by the board of directors of Artisan Funds annually, a fee is paid to Artisan based on an annual percentage of the average daily net assets of each Artisan Fund ranging from 0.63% to 1.25%. Artisan generally collects revenues related to these services on the last business day of each month and records them in Management fees in the Consolidated Statement of Operations. Artisan has contractually agreed to waive its management fees or reimburse for expenses incurred to the extent necessary to limit annualized ordinary operating expenses incurred by certain of the Artisan Funds to not more than 1.50% of average daily net assets, and 1.25% of the fund’s average daily net assets for the Artisan Partners High Income Fund. In addition, Artisan may voluntarily waive fees or reimburse any of the Artisan Funds for other expenses. The officers and a director of Artisan Funds who are affiliated with Artisan receive no compensation from the funds. At March 31, 2014 and December 31, 2013, accounts receivable included $3 thousand and $9 thousand due from the Funds, respectively.

Fees for managing the Funds and amounts waived or reimbursed by Artisan for fees and expenses (including management fees) are as follows:

	For the Three Months Ended March 31,
	2014		2013
Investment management fees:
Artisan Funds	$	136,586	$	98,080
Fee waiver / expense reimbursement:
Artisan Funds	$	60	$	121

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Affiliate transactions—Artisan Global Funds

Artisan has agreements to serve as the investment manager and promoter of Artisan Global Funds, with which certain of Artisan employees are affiliated. Under the terms of these agreements, a fee is paid based on an annual percentage of the average daily net assets of each fund ranging from 0.75% to 1.80%. Artisan reimburses each sub-fund of Artisan Global Funds to the extent that sub-fund’s expenses, not including Artisan’s fee, exceed certain levels, which range from 0.10% to 0.20%. At March 31, 2014 and December 31, 2013, respectively, accounts receivable included $1.2 million and $2.2 million due from Artisan Global Funds.

Fees for managing Artisan Global Funds and amounts reimbursed to Artisan Global Funds by Artisan are as follows:

	For the Three Months Ended March 31,
	2014		2013
Investment management fees:
Artisan Global Funds	$	3,239	$	1,439
Fee waiver / expense reimbursement:
Artisan Global Funds	$	82	$	126

Affiliate transactions—Launch Equity

Artisan has an agreement to serve as the investment manager of Launch Equity. Under the terms of Artisan’s agreement with Launch Equity, Artisan earns a quarterly fee based on the value of the closing capital account of each limited partner for the quarter, at the rate of 1.00% (annualized). At Artisan’s discretion, the fee may be waived and certain expenses reimbursed to the extent they exceed a certain level. Artisan expects to waive 100% of the quarterly fee and reimburse Launch Equity for all operating expenses, and Artisan may waive other expenses as well. Artisan is also entitled to receive an allocation of profits equal to 20% of Launch Equity’s net capital appreciation as determined at the conclusion of its fiscal year. That amount, which Artisan also expects to waive, is calculated at the end of the Launch Equity’s fiscal year. Artisan waived its incentive allocation for the year ended December 31, 2013. Expense reimbursements totaled $38 thousand and $40 thousand for the three months ended March 31, 2014 and 2013, respectively.

Affiliate transactions—AIC

Artisan had and has cost sharing arrangements with entities controlled by Andrew A. Ziegler (APAM’s Chairman of the Board and former Artisan employee) and Carlene M. Ziegler (also a former Artisan employee), pursuant to which the Ziegler entities currently reimburse Artisan for the costs associated with three employees using Artisan’s office space while they transition to new facilities, which is expected to occur by the end of June 2014. In addition, Artisan has obtained and paid for insurance policies covering potential liability AIC may incur as the prior general partner of Holdings. At March 31, 2014 and December 31, 2013, accounts receivable included $139 thousand and $243 thousand due from Ziegler entities, respectively.

Note 16. Subsequent Events

Distributions and dividends

On April 10, 2014, Artisan Partners Holdings paid an aggregate tax distribution of $48.9 million to partnership unit holders, including APAM. On April 22, 2014, the board of directors of APAM declared a distribution by Artisan Partners Holdings of $30.6 million to holders of Artisan Partners Holdings partnership units, including APAM. On the same date, the board declared a quarterly dividend of $0.55 per share of APAM’s Class A common stock and a dividend of $0.81 per share of APAM’s convertible preferred stock. The APAM dividends are payable on May 30, 2014, to shareholders of record as of May 16, 2014.

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Item 2. Management’s Discussion and Analysis of Financial Condition andResults of Operations

Overview

We are an investment management firm focused on providing high-value added, active investment strategies to sophisticated clients globally. Our operations are conducted through Artisan Partners Holdings and its subsidiaries. We derive essentially all of our revenues from investment management fees. Nearly all our fees are based on a specified percentage of clients’ average assets under our management. We operate our business in a single segment.

We have six autonomous investment teams that oversee fourteen distinct U.S., non-U.S. and global investment strategies. Strategies are offered through multiple investment vehicles to accommodate a broad range of client mandates. During the March quarter of 2014 we launched our fourteenth investment strategy, the Artisan Partners High Income strategy, which is managed by our Credit team.

As of March 31, 2014, our assets under management (“AUM”) were $107.4 billion. During the three months ended March 31, 2014 we generated $201.8 million in revenues on $106.2 billion in average AUM. A combination of net client cash inflows of $1.4 billion and market appreciation of $648 million contributed to our growth in AUM and revenues for the three months ended March 31, 2014. For the three months ended March 31, 2014 we had positive net client cash flows in 10 of our 14 strategies and in four out of five distribution channels, sourced from clients located in the U.S. and abroad. As of March 31, 2014 and 2013, 11% of our AUM was sourced from non-U.S. clients.

We post updated information about our assets under management under the Financial Information section of our Investor Relations website (www.apam.com) after the conclusion of the seventh NYSE trading day of each month.

As of March 31, 2014 we had approximately 320 employees.

Factors Impacting our Results of Operations

Economic Environment

Global equity market conditions can materially affect our financial performance. Global equity markets were generally positive for the three months ended March 31, 2014 and 2013, as reflected by the total returns of the S&P 500, MSCI All Country World and MSCI EAFE indices:

	For the Three Months Ended March 31,
	2014		2013
S&P 500 total returns	1.8	%	10.6	%
MSCI All Country World total returns	1.1	%	6.5	%
MSCI EAFE total returns	0.7	%	5.1	%

Organizational Structure

On March 12, 2013, APAM and the intermediary holding company through which APAM conducts its operations, Artisan Partners Holdings, completed a series of transactions (the “IPO Reorganization”) to reorganize their capital structures in connection with the initial public offering (“IPO”) of APAM’s Class A common stock. The IPO Reorganization and IPO were completed on March 12, 2013. The IPO Reorganization was designed to create a capital structure that preserves our ability to conduct our business through Holdings, while permitting us to raise additional capital and provide access to liquidity through a public company. The IPO Reorganization is described in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014.

The historical results of operations discussed below are the combined results of APAM and Holdings. Because APAM and Holdings were under common control at the time of the IPO Reorganization, APAM’s acquisition of control of Holdings was accounted for as a transaction among entities under common control. APAM has been allocated a part of Holdings’ net income since March 12, 2013, when it became Holdings’ general partner. Our employees and other investors held approximately 59% of the equity interests in Holdings as of March 31, 2014. Our post-IPO results reflect that significant noncontrolling interest. As of March 31, 2014, our net income represented approximately 41% of Holdings’ net income.

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On March 12, 2014, we completed an offering of 9,284,337 shares of Class A common stock and utilized all of the net proceeds to purchase an aggregate of 6,284,337 common units and 2,256,883 preferred units of Holdings from certain of the limited partners of Holdings and 743,117 shares of APAM convertible preferred stock from a private equity fund controlled by Hellman & Friedman LLC. In connection with the offering, APAM received 9,284,337 general partnership units of Holdings, and APAM’s ownership interest in Holdings increased from 29% to 41%.

Changes Related to Class B Common Units of Artisan Partners Holdings

A significant portion of our historical compensation and benefits expense related to Holdings’ Class B limited partnership interests. Prior to the IPO Reorganization, Class B limited partnership interests were granted to certain employees. The Class B limited partnership interests provided both an interest in future profits of Holdings as well as an interest in the overall value of Holdings. Class B limited partnership interests generally vested ratably over a five-year period from the date of grant. Holders of Class B limited partnership interests were entitled to fully participate in profits from and after the date of grant. The distribution of profits associated with these limited partnership interests was recorded as compensation and benefits expense.

Prior to the IPO Reorganization, all vested Class B limited partnership interests were subject to mandatory redemption on termination of employment for any reason, with payment in cash typically in annual installments over the five years following termination of employment. Unvested Class B limited partnership interests were forfeited on termination of employment. Due to the redemption feature, the Class B grants were considered liability awards. Compensation cost was measured at the grant date based on the fair value of the limited partnership interests granted, and was re-measured each period. Changes in the fair value that occurred after the end of the vesting period were recorded as compensation cost of the period in which the changes occurred through settlement of the limited partnership interests.

As part of the IPO Reorganization, the grant agreements pursuant to which the Class B interests were granted were amended to eliminate the cash redemption feature. As a result, liability award accounting no longer applied and the costs associated with distributions to our Class B partners and changes in the value of Class B liability awards were no longer recognized as compensation expense. However, we continue to record compensation expense for Class B common units that were unvested at the time of the IPO Reorganization over their remaining vesting period, based on the fair value of the awards upon modification. As a result of the IPO Reorganization, we recognized a non-recurring compensation expense based on the difference between the carrying value of the liability associated with the vested Class B common units immediately prior to the IPO Reorganization and the value based on the offering price per share of Class A common stock ($30.00 per share). The amount of this non-recurring charge was $287.3 million. In the March quarter of 2013, we also recognized $56.8 million of compensation expense relating to a cash incentive compensation payment we made to certain of our portfolio managers in connection with the IPO and $20.5 million of compensation expense associated with the reallocation of profits after the IPO which otherwise would have been allocable and distributable to Holdings’ pre-IPO non-employee partners but were instead allocated to certain of Artisan Partners Holdings’ employee-partners.

Issuance of CVRs

As part of the IPO Reorganization, Holdings issued Partnership CVRs and APAM issued APAM CVRs in order to provide holders of Holdings preferred units and APAM convertible preferred stock with economic rights following the reorganization and IPO similar (although not identical) to the economic rights they possessed with respect to Holdings prior to the reorganization and IPO. The CVRs were terminated in conjunction with our common stock offering that closed on November 6, 2013 with no amounts paid or payable by us. Prior to their termination, the CVRs were classified as liabilities and accounted for under ASC 815 as derivatives.For the three months ended March 31, 2013, a gain of $24.8 million was recorded in other non-operating income (loss) to reflect a decrease in the fair value of the CVR liability from March 12 to March 31, 2013.

Tax Impact of IPO Reorganization

Historically, our business was not subject to U.S. federal and certain state income taxes. However, APAM, which became the general partner of Holdings as part of the IPO Reorganization, is subject to U.S. federal and state income taxation on its allocable portion of the income of Holdings.

In connection with the IPO, APAM entered into two tax receivable agreements (“TRAs”). Under the first TRA, APAM generally is required to pay to the holders of convertible preferred stock issued as consideration for the H&F Corp Merger (or Class A common stock issued upon conversion of that convertible preferred stock) 85% of the applicable cash savings, if any, in U.S. federal and state income tax that APAM actually realizes (or is deemed to realize in certain circumstance) as a result of (i) the tax attributes of the preferred units APAM acquired in the merger, (ii) net operating losses available as a result of the merger and (iii) tax benefits related to imputed interest.

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Under the second TRA, APAM generally is required to pay to the holders of limited partnership units of Holdings (or Class A common stock or convertible preferred stock issued upon exchange of limited partnership units) 85% of the amount of cash savings, if any, in U.S. federal and state income tax that APAM actually realizes (or is deemed to realize in certain circumstances) as a result of (i) certain tax attributes of their units sold to APAM or exchanged (for shares of Class A common stock or convertible preferred stock) and that are created as a result of the sales or exchanges and payments under the TRAs and (ii) tax benefits related to imputed interest. Under both agreements, APAM generally will retain the benefit of the remaining 15% of the applicable tax savings.

As of March 31, 2014, deferred tax assets of $474.8 million and amounts payable under the TRAs of $405.2 million have been recorded in the Condensed Consolidated Statements of Financial Condition primarily as a result of the above items and other tax impacts of the IPO Reorganization. APAM’s purchase of Holdings’ common and preferred units with a portion of the 2014 Follow-on Offering proceeds resulted in an increase to deferred tax assets of approximately $287.4 million and an increase in amounts payable under tax receivable agreements of approximately $244.3 million.

Costs of Being a Public Company

Following the IPO, we have incurred, and expect to continue to incur, additional expenses as a result of becoming a public company, including expenses related to additional staffing, directors’ and officers’ liability insurance, directors fees, SEC reporting and compliance (including Sarbanes-Oxley compliance), transfer agent fees, professional fees and other similar expenses. These additional expenses have increased and will continue to increase our general and administrative expenses and reduce our net income. Further, we may incur significant legal, accounting and other fees and expenses associated with future offerings of Class A common stock. We incurred $1.1 million of expenditures in the March quarter of 2014 in connection with the 2014 Follow-on Offering. Those expenses were capitalized and reduced our equity.

Financial Overview

Key Performance Indicators

When we review our performance we consider, among other things, the following:

	For the Three Months Ended March 31,
	2014			2013
	(unaudited; dollars in millions)
Assets under management at period end	$	107,397		$	83,178
Average assets under management (1)	$	106,172		$	79,152
Net client cash flows	$	1,413		$	2,186
Total revenues	$	201.8		$	148.2
Weighted average fee (2)	77			76
Adjusted operating margin (3)	45.1		%	37.0		%
(1) We compute average assets under management by averaging day-end assets under management for the applicable period.
(2) We compute our weighted average fee by dividing annualized investment management fees by average assets under management for the applicable period.
(3) Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in “-Supplemental Non-GAAP Financial Information” below.

Assets Under Management and Investment Performance

Changes to our operating results from one period to another are primarily caused by changes in the amount of our assets under management. Changes in the relative composition of our assets under management among our investment strategies and products and the effective fee rates on our products could also impact our operating results, and in some periods the impact could be material. However, for the three months ended March 31, 2014 and 2013, our operating results were primarily impacted by changes in the amount of our assets under management.

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Our assets under management increase or decrease with the net inflows or outflows of client assets into our various investment strategies and with the investment performance of these strategies. The amount and composition of our assets under management are, and will continue to be, influenced by a variety of factors including, among others:

• investment performance, including fluctuations in both the financial markets and foreign currency exchange rates and the quality of our investment decisions;

• flows of client assets into and out of our various strategies and investment vehicles;

• our decision to close strategies or limit the growth of assets in a strategy when we believe it is in the best interest of our clients;

• our ability to attract and retain qualified investment, management, and marketing and client service professionals;

• competitive conditions in the investment management and broader financial services sectors; and

• investor sentiment and confidence.

The table below sets forth changes in our total AUM:

	For the Three Months Ended March 31,						Period-to-Period
	2014			2013			$			%
	(unaudited; in millions)
Beginning assets under management	$	105,477		$	74,334		$	31,143		41.9	%
Gross client cash inflows	6,639			6,324			315			5.0	%
Gross client cash outflows	(5,226		)	(4,138		)	(1,088		)	(26.3	)%
Net client cash flows	1,413			2,186			(773		)	(35.4	)%
Market appreciation (depreciation)	648			6,658			(6,010		)	(90.3	)%
Net transfers (1)	$	(141	)	$	—		(141		)	(100.0	)%
Ending assets under management	$	107,397		$	83,178		$	24,219		29.1	%
Average assets under management	$	106,172		$	79,152		$	27,020		34.1	%
(1) Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy or investment vehicle and into another strategy or vehicle. The $141 million transferred out of one strategy in the first quarter was transferred back into another strategy in early April 2014.

For the three months ended March 31, 2014, 10 of our 14 investment strategies experienced net client cash inflows, resulting in net client cash inflows of $1.4 billion for the period. Our Non-U.S. Growth strategy, managed by our Global Equity team, and our Global Value strategy, managed by our Global Value team, received the most net inflows during the quarter, gathering net inflows of $1.4 billion and $524 million, respectively. During the three months ended March 31, 2014, each of the three strategies managed by our U.S. Value team and our Emerging Markets strategy experienced net client cash outflows. Artisan Funds and Artisan Global Funds had $2.3 billion of net inflows primarily sourced through our broker-dealer and financial advisor channels.

Separate accounts net outflows of $911 million include the effect of a $722 million outflow resulting from a separate account client termination in March within our Value Equity strategy. The pension fund client communicated that the termination was a result of its decision to consolidate assets with a smaller number of managers and reduce its overall cost structure. The termination is evidence that our flows will be lumpy over time and also reflects our commitment to fee discipline which is one of the cornerstones of our financial model. Over the long-term our financial model has been critical to our ability to attract and retain investment talent, deliver strong financial results and produce a stable and diverse business able to weather all market environments.

Historically, we have observed that client activity tends to be higher in the first and fourth quarters of the calendar year, and lower in the second and third quarters. However, there can be no guarantee that past experience will be indicative of future activity.

We monitor the availability of attractive investment opportunities relative to the amount of assets we manage in each of our investment strategies. When appropriate, we will close a strategy to new investors or otherwise take action to slow or restrict its growth, even though our aggregate AUM may be negatively impacted in the short term. We may also re-open a strategy, widely or selectively, to fill available capacity or manage the diversification of our client base in that strategy. We believe that management of our investment capacity protects our ability to manage assets successfully, which protects the interests of our clients and, in the long term, protects our ability to retain client assets and maintain our profit margins.

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As of the date of this filing, our Non-U.S. Small-Cap Growth, Non-U.S. Value, U.S. Mid-Cap Growth, U.S. Small-Cap Value, U.S. Mid-Cap Value, U.S. Small-Cap Growth and Global Value strategies are closed to most new investors and client relationships.

When we close a strategy, we typically continue to allow additional investments in the strategy by existing clients and certain related entities, which means that during a given period we could have net client cash inflows even in a closed strategy. However, when a strategy is closed or its growth is restricted we expect there to be periods of net client cash outflows.

On February 14, 2014, we closed our Global Value strategy, including Artisan Global Value Fund, to most new investors and client relationships. The Global Value strategy had net client cash inflows of $524 million and $959 million for the three months ended March 31, 2014 and 2013, respectively. We manage capacity for each of our strategies individually, taking an approach that considers total assets under management, the velocity of asset growth and the mix of business across distribution channels, geographic regions and client types. We also consider other factors, such as the exceptional market performance over the past five years, which has contributed to the rate of asset growth in the Global Value strategy.

We believe that growth in AUM in an investment strategy requires the availability of attractive investment opportunities relative to the amount of AUM in the strategy at a time when the strategy has a competitive performance track record and there is stable or growing client demand for the strategy or asset class. When we believe that each of these factors is present with respect to an investment strategy, we say we have “realizable capacity” in that strategy. We believe that we currently have realizable capacity particularly in some of our non-U.S. and global strategies (such as our Non-U.S. Growth, Global Equity and Global Opportunities strategies), where we believe we are well-positioned to take advantage of increasing client and investor demand.

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The table below sets forth the total AUM for each of our investment teams and strategies as of March 31, 2014, the inception date for each investment composite, and the value-added by each strategy over a multi-horizon time period as of March 31, 2014.

	Inception	Strategy AUM	Value-Added (1) (bps)
Investment Team and Strategy	Date	(in $MM)	1 YR	3 YR	5 YR	10 YR	Inception
Global Equity Team		(unaudited)
Non-U.S. Growth Strategy	1/1/1996	$26,324	(1)	557	400	287	648
Non-U.S. Small-Cap Growth Strategy	1/1/2002	$1,819	312	624	445	571	544
Global Equity Strategy	4/1/2010	$304	123	803	N/A	N/A	648
Global Small-Cap Growth Strategy	7/1/2013	$157	N/A	N/A	N/A	N/A	225
U.S. Value Team
U.S. Mid-Cap Value Strategy	4/1/1999	$15,916	(320)	108	(93)	283	569
U.S. Small-Cap Value Strategy	6/1/1997	$4,048	(619)	(578)	(343)	187	470
Value Equity Strategy	7/1/2005	$2,087	(521)	(60)	45	N/A	69
Growth Team
U.S. Mid-Cap Growth Strategy	4/1/1997	$17,228	756	241	213	242	617
U.S. Small-Cap Growth Strategy	4/1/1995	$3,079	424	510	558	190	112
Global Opportunities Strategy	2/1/2007	$2,995	238	502	687	N/A	630
Global Value Team
Non-U.S. Value Strategy	7/1/2002	$17,161	560	738	770	615	726
Global Value Strategy	7/1/2007	$14,834	776	951	724	N/A	672
Emerging Markets Team
Emerging Markets Strategy	7/1/2006	$1,326	74	(290)	(153)	N/A	(91)
Credit Team
High Income Strategy (2)	4/1/2014	$76	N/A	N/A	N/A	N/A	N/A
Total Assets Under Management (3)		$107,397
(1) Value-added is the amount in basis points by which the average annual gross composite return of each of our strategies has outperformed the broad-based market index most commonly used by our clients to compare the performance of the relevant strategy for the periods presented and since its inception date. Value-added for periods less than one year is not annualized. The market indices used to compute the value added since inception date for each of our strategies are as follows: Non-U.S. Growth strategy—MSCI EAFE® Index; Non-U.S. Small-Cap Growth strategy—MSCI EAFE® Small Cap Index; Global Equity strategy—MSCI ACWI® Index; Global Small-Cap Growth strategy—MSCI ACWI® Small Cap Index; U.S. Small-Cap Value strategy—Russell 2000® Index; U.S. Mid-Cap Value strategy—Russell Midcap® Index; Value Equity strategy—Russell 1000® Index; U.S. Mid-Cap Growth strategy—Russell Midcap® Index; Global Opportunities strategy—MSCI ACWI® Index; U.S. Small-Cap Growth strategy—Russell 2000® Index; Non-U.S. Value strategy—MSCI EAFE® Index; Global Value strategy—MSCI ACWI® Index; Emerging Markets strategy—MSCI Emerging Markets IndexSM.
(2) High Income Strategy’s composite inception date is April 1, 2014 for the purposes of calculating strategy performance. The strategy began investment operations on March 19, 2014. We seeded the Artisan Partners High Income Fund with an initial $10 million.
(3) Includes an additional $42.5 million in assets managed in a portfolio not currently made available to outside investors to evaluate its potential viability as a strategy to be offered to clients.

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The tables below set forth changes in our AUM by investment team:

	By Investment Team
Three Months Ended	Global Equity			U.S. Value			Growth			Global Value			Emerging Markets			Credit		Total
March 31, 2014	(unaudited; in millions)
Beginning assets under management	$	27,317		$	23,024		$	22,433		$	30,957		$	1,746		$	—	$	105,477
Gross client cash inflows	2,622			850			1,389			1,688			14			76		6,639
Gross client cash outflows	(979		)	(2,163		)	(897		)	(795		)	(392		)	—		(5,226		)
Net client cash flows	1,643			(1,313		)	492			893			(378		)	76		1,413
Market appreciation (depreciation)	(356		)	340			419			286			(41		)	—		648
Net transfers (1)	—			—			—			(141		)	—			—		(141		)
Ending assets under management	$	28,604		$	22,051		$	23,344		$	31,995		$	1,327		$	76	$	107,397
Average assets under management	$	27,715		$	22,388		$	23,290		$	31,306		$	1,464		$	62	$	106,172
March 31, 2013
Beginning assets under management	$	20,092		$	16,722		$	14,692		$	19,886		$	2,942		$	—	$	74,334
Gross client cash inflows	1,540			1,116			1,410			1,994			264			—		6,324
Gross client cash outflows	(908		)	(924		)	(569		)	(343		)	(1,394		)	—		(4,138		)
Net client cash flows	632			192			841			1,651			(1,130		)	—		2,186
Market appreciation (depreciation)	1,358			2,334			1,336			1,677			(47		)	—		6,658
Net transfers	—			—			—			—			—			—		—
Ending assets under management	$	22,082		$	19,248		$	16,869		$	23,214		$	1,765		$	—	$	83,178
Average assets under management	$	21,270		$	18,157		$	16,144		$	21,720		$	1,861		$	—	$	79,152
(1) Net transfers represent certain amounts that we have identified as having been transferred out of one investment strategy or investment vehicle and into another strategy or vehicle. The $141 million transferred out of one strategy in the first quarter was transferred back into another strategy in early April 2014.

The goal of our marketing, distribution and client services efforts is to establish and maintain a client base that is diversified by investment strategy, investment vehicle and distribution channel. As distribution channels have evolved to have more institutional-like decision making processes and longer-term investment horizons, we have expanded our distribution efforts into those areas. We have experienced strong growth in AUM through broker-dealers that have centralized the process for selecting which funds to offer to a relatively limited number of key decision-makers that exhibit institutional decision-making behavior, which we believe allows us to gain broad exposure to broker-dealer and private bank clients in a manner consistent with our marketing strategy.

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The table below sets forth our AUM by distribution channel:

	As of March 31, 2014				As of March 31, 2013
	$ in millions		% of total		$ in millions		% of total
	(unaudited)				(unaudited)
Defined Contribution	$	21,503	20.0	%	$	16,904	20.3	%
Broker-Dealer	22,932		21.4	%	15,828		19.0	%
Financial Advisor	11,540		10.8	%	7,690		9.3	%
Institutional	45,041		41.9	%	38,198		45.9	%
Retail	6,381		5.9	%	4,558		5.5	%
Ending Assets Under Management(1)	$	107,397	100.0	%	$	83,178	100.0	%
(1) The allocation of AUM by distribution channel involves the use of estimates and the exercise of judgment.

The following tables set forth the changes in our AUM for Artisan Funds, Artisan Global Funds and separate account clients:

Three Months Ended	Artisan Funds & Artisan Global Funds			Separate Accounts			Total
March 31, 2014	(unaudited; in millions)
Beginning assets under management	$	59,881		$	45,596		$	105,477
Gross client cash inflows	5,503			1,136			6,639
Gross client cash outflows	(3,179		)	(2,047		)	(5,226		)
Net client cash flows	2,324			(911		)	1,413
Market appreciation (depreciation)	305			343			648
Net transfers	(35		)	(106		)	(141		)
Ending assets under management	$	62,475		$	44,922		$	107,397
Average assets under management	$	60,761		$	45,411		$	106,172
March 31, 2013
Beginning assets under management	$	39,603		$	34,731		$	74,334
Gross client cash inflows	4,570			1,754			6,324
Gross client cash outflows	(2,222		)	(1,916		)	(4,138		)
Net client cash flows	2,348			(162		)	2,186
Market appreciation (depreciation)	3,733			2,925			6,658
Net transfers	—			—			—
Ending assets under management	$	45,684		$	37,494		$	83,178
Average assets under management	$	43,205		$	35,947		$	79,152

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Results of Operations

Three months ended March 31, 2014, Compared to Three months ended March 31, 2013

	For the Three Months Ended March 31,						For the Period-to-Period
	2014			2013			$			%
Statements of operations data:	(unaudited; in millions, except per share data)
Revenues	$	201.8		$	148.2		$	53.6		36	%
Operating Expenses
Total compensation and benefits	109.5			548.9			(439.4		)	(80	)%
Other operating expenses	25.1			20.6			4.5			22	%
Total operating expenses	134.6			569.5			(434.9		)	(76	)%
Total operating income	67.2			(421.3		)	488.5			116	%
Non-operating income (loss)
Interest expense	(2.9		)	(3.2		)	0.3			9	%
Other non-operating income	(0.9		)	29.6			(30.5		)	(103	)%
Total non-operating income (loss)	(3.8		)	26.4			(30.2		)	(114	)%
Income before income taxes	63.4			(394.9		)	458.3			116	%
Provision for income taxes	11.2			4.4			6.8			155	%
Net income before noncontrolling interests	52.2			(399.3		)	451.5			113	%
Less: Noncontrolling interests - Artisan Partners Holdings	44.2			(407.1		)	451.3			111	%
Less: Noncontrolling interests - Launch Equity	(0.6		)	4.8			(5.4		)	(113	)%
Net income attributable to Artisan Partners Asset Management Inc.	$	8.6		$	3.0		$	5.6		187	%
Per Share Data
Net income (loss) available to Class A common stock per basic share	$	(2.29	)	$	0.19
Net income (loss) available to Class A common stock per diluted share	$	(2.29	)	$	0.19
Weighted average basic shares of Class A common stock outstanding	20,214,242			12,728,949
Weighted average diluted shares of Class A common stock outstanding	20,214,242			15,294,412

Revenues

Essentially all of our revenues consist of investment management fees earned from managing clients’ assets. Our investment management fees fluctuate based on a number of factors, including the total value of our AUM, the composition of AUM among our investment vehicles (including pooled vehicles available to U.S. investors, pooled vehicles available to non-U.S. investors and separate accounts) and our investment strategies (which have different fee rates), changes in the investment management fee rates on our products, the extent to which we enter into fee arrangements that differ from our standard fee schedules, which can be affected by custom and the competitive landscape in the relevant market, and for the few accounts on which we earn performance-based fees, the investment performance of those accounts relative to their designated benchmarks.

The increase in revenues of $53.6 million, or 36%, for the three months ended March 31, 2014, compared to the three months ended March 31, 2013, was driven primarily by a $27.0 billion, or 34.1%, increase in our average AUM. The increase in our average AUM was primarily attributable to net client cash inflows and market appreciation between March 31, 2013 and March 31, 2014.

31

Our weighted average investment management fee was 77 basis points for the three months ended March 31, 2014, compared to 76 basis points for the three months endedMarch 31, 2013. Separate accounts, including U.S-registered mutual funds, non-U.S. funds and collective investment trusts we sub-advise, paid a weighted average fee of 55 basis points for the three months ended March 31, 2014 and 2013. These assets represented 42% and 45% of our total AUM as of March 31, 2014 and 2013, respectively. Taken together, the assets of Artisan Funds and Artisan Global Funds, to which we provide services in addition to the services we provide to separate account clients, paid a weighted average fee of 93 basis points for the three months ended March 31, 2014 and 2013. These assets represented 58% and 55% of our AUM as of March 31, 2014 and 2013, respectively.

For the three months ended March 31, 2014 and 2013, fees from separate accounts, including U.S.-registered mutual funds, non-U.S. funds and collective investment trusts we sub-advise, represented $62.0 million and $48.7 million of our revenues, respectively. For the three months ended March 31, 2014 and 2013, fees from Artisan Funds represented $136.6 million and $98.1 million of our revenues, respectively, and fees from Artisan Global Funds represented $3.2 million and $1.4 million of our revenues, respectively.

Operating Expenses

The decrease in total operating expenses of $434.9 million for the three months ended March 31, 2014, compared to the three months ended March 31, 2013, was primarily attributable to a decrease in compensation and benefits expense of $439.4 million.

Compensation and Benefits

	For the Three Months Ended March 31,				Period-to-Period
	2014		2013		$			%
	(unaudited; in millions)
Salaries, incentive compensation and benefits (1)	$	81.6	$	72.7	$	8.9		12	%
Restricted share compensation expense	4.3		—		4.3			—	%
Total salaries, incentive compensation and benefits	85.9		72.7		13.2			18	%
Change in value of Class B liability awards	—		41.9		(41.9		)	(100	)%
Class B award modification expense	—		287.3		(287.3		)	(100	)%
Amortization expense on pre-offering Class B awards	23.6		4.0		19.6			490	%
Pre-offering related compensation - share-based awards	23.6		333.2		(309.6		)	(93	)%
Pre-offering related cash incentive compensation	—		56.8		(56.8		)	(100	)%
Pre-offering related bonus make-whole compensation	—		20.5		(20.5		)	(100	)%
Distributions on Class B liability awards	—		65.7		(65.7		)	(100	)%
Pre-offering related compensation - other	—		143.0		(143.0		)	(100	)%
Total compensation and benefits	$	109.5	$	548.9	$	(439.4	)	(80	)%
(1) Excluding restricted share compensation expense

The increase in salaries, incentive compensation, and benefits was driven primarily by accrued incentive compensation expense for our investment and marketing professionals. Cash incentive compensation is directly linked to our revenues and increased by $15.0 million as a result of higher investment management fee revenue during the three months ended March 31, 2014, as compared to the three months ended March 31, 2013. Partially offsetting the increase was a $5.8 million decrease in severance expense and a $3.2 million decrease in incentive compensation expense related to a special incentive compensation plan for certain portfolio managers. The incentive compensation plan, which ended on December 31, 2013, provided certain portfolio managers with additional cash compensation based on the then-current value of shares of mutual funds managed by those portfolio managers over a three-year period.

Pursuant to the 2013 Omnibus Incentive Compensation Plan, we have issued restricted shares of Class A common stock to our employees. Compensation expense recognized related to restricted shares was $4.3 million for the three months ended March 31, 2014. We expect to grant additional equity awards on an annual basis. The amount of equity granted will vary from year to year and be influenced by our results.

Salaries, incentive compensation and benefits was 43% and 49% of our revenues for the three months ended March 31, 2014, and 2013, respectively.

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Pre-offering related share-based compensation expense decreased $309.6 million for the three months ended March 31, 2014, compared to the three months ended March 31, 2013, as a result of a change in accounting for share based awards. Prior to the IPO Reorganization in March 2013, our Class B share-based awards were classified as liabilities. As part of the IPO Reorganization, we amended the Class B share-based grant agreements to eliminate the cash redemption feature of those awards. For the three months ended March 31, 2013, we recognized $41.9 million in compensation expense to record the liability awards at fair value. Immediately after the amendment of the grant agreements, we incurred a $287.3 million compensation charge related to the award modification. Compensation expense for these awards after the IPO Reorganization represents the amortization of the fair value of unvested awards at the date of the IPO Reorganization over the remaining vesting term.

Pre-offering related other compensation decreased $143.0 million for the three months ended March 31, 2014 compared to the three months ended March 31, 2013. During the three months ended March 31, 2013, we recognized $56.8 million in compensation expense related to a cash incentive paid to certain of our portfolio managers in connection with the IPO, $65.7 million in compensation expense related to distributions of the retained earnings of Holdings made to our pre-IPO employee partners, and $20.5 million in compensation expense representing profits after the IPO otherwise allocable and distributable, in the aggregate, to Artisan Partners Holdings’ pre-IPO non-employee partners which were instead allocated and distributed to certain employee-partners.

Other operating expenses

Other operating expenses increased $4.5 million for the three months ended March 31, 2014 compared to the three months ended March 31, 2013 primarily due to a $2.9 million increase in distribution and marketing expenses related to higher average AUM and revenues and a $1.1 million increase in communication and technology expenses. We expect our Communication and technology expense to continue to increase in future quarters.

Non-Operating Income (Loss)

The decrease in non-operating income of $30.2 million for the three months ended March 31, 2014, compared to the three months ended March 31, 2013, was primarily due to a $24.8 million gain on the valuation of contingent value rights recognized during the three months ended March 31, 2013. The gain on the CVR was the result of an increase in our stock price from the $30.00 per share IPO price utilized in determining the initial fair value of the CVR liability to the closing price of $39.45 per share on March 31, 2013. As a derivative liability, all changes in the fair value of this liability were recorded to current earnings. The CVRs were terminated on November 6, 2013.

Gains of Launch Equity decreased $5.4 million in the three months ended March 31, 2014, compared to the prior year period. Gains of Launch Equity represent net realized and unrealized gains of the underlying assets of Launch Equity. Nearly all gains are allocable to, and are offset by, net income (loss) attributable to noncontrolling interests - Launch Equity.

Non-operating income (loss) for the three months ended March 31, 2014 also includes $0.3 million of expense related to the change in our estimate of the payment obligation under the tax receivable agreements. The effect of subsequent changes in any of our tax estimates after the date of an exchange or sale that triggers an obligation under the tax receivable agreements will be included in net income. Similarly, the effect of changes in enacted tax rates and in applicable tax laws will be included in net income.

Provision for Income Taxes

The increase in provision for income taxes represents APAM’s U.S. federal and state income tax on its allocable portion of the income of Holdings. APAM’s effective income tax rate for the three months ended March 31, 2014 and 2013 was 17.7% and 11.2%, respectively. Several factors contribute to the effective tax rate, including a rate benefit attributable to the fact that approximately 62% and 78% of Holdings’ earnings were not subject to corporate-level taxes for the three months ended March 31, 2014 and 2013, respectively. Income (loss) before income taxes includes amounts that are passed through to unit holders of Holdings and noncontrolling interest and is not taxable to Holdings and its subsidiaries, which reduces the effective tax rate. This favorable impact is partially offset by the impact of certain permanent items, primarily attributable to pre-IPO share-based compensation expenses that are not deductible for tax purposes. These factors are expected to continue to impact the effective tax rate for future years, although as our ownership in Holdings increases, the effective tax rate will likewise increase as more income will be subject to corporate-level taxes.

Prior to our IPO and IPO Reorganization in March 2013, none of Holdings’ earnings were subject to U.S. corporate-level taxes.

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Supplemental Non-GAAP Financial Information

Our management uses non-GAAP measures (referred to as “adjusted” measures) of net income and operating income to evaluate the profitability and efficiency of the underlying operations of our business and as a factor when considering net income available for distributions and dividends. These adjusted measures remove the impact of (1) pre-offering related compensation (as described below), (2) offering related proxy expense (as described below), (3) the net gain (loss) on the valuation of contingent value rights, and (4) adjustments to remove the non-operational complexities of our structure by adding back non-controlling interests and assuming all income of Artisan Partners Holdings is allocated to us. Management believes these non-GAAP measures provide more meaningful information to analyze our profitability and efficiency between periods and over time. We have included these non-GAAP measures to provide investors with the same financial metrics used by management to manage the company.

Non-GAAP measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Our non-GAAP measures may differ from similar measures used by other companies, even if similar terms are used to identify such measures. Our non-GAAP measures are as follows:

• Adjusted net income represents net income excluding the impact of (1) pre-offering related compensation, as defined below, (2) offering related proxy expense, as defined below, and (3) net gain (loss) on the valuation of contingent value rights, and reflects income taxes as if all outstanding limited partnership units of Artisan Partners Holdings and all shares of our convertible preferred stock were exchanged for or converted into shares of our Class A common stock on a one-for-one basis. Assuming the full exchange and conversion, all income of Artisan Partners Holdings is treated as if it were allocated to us, and the adjusted provision for income taxes represents an estimate of income tax expense at an effective rate reflecting assumed federal, state, and local income taxes. The estimated effective tax rate was 36.2% and 35.8% for the three months ended March 31, 2014 and 2013, respectively.

• Adjusted net income per adjusted share is calculated by dividing adjusted net income (loss) by adjusted shares. The number of adjusted shares is derived by assuming the vesting of all unvested shares of Class A common stock, the exchange of all outstanding limited partnership units of Artisan Partners Holdings and the conversion of all outstanding shares of our convertible preferred stock for or into shares of our Class A common stock on a one-for-one basis.

• Adjusted operating income represents the operating income (loss) of the consolidated company excluding offering related proxy expense and pre-offering related compensation.

• Adjusted operating margin is calculated by dividing adjusted operating income (loss) by total revenues.

• Adjusted EBITDA represents income (loss) before income taxes, interest expense and depreciation and amortization, adjusted to exclude the impact of net income (loss) attributable to non-controlling interests, offering related proxy expense, pre-offering related compensation, each as defined below, and the net gain (loss) on the valuation of contingent value rights.

• For the three months ended March 31, 2014, pre-offering related compensation includes the amortization of unvested Class B common units of Artisan Partner Holdings that were granted prior to the IPO, which closed on March 12, 2013. For the three months ended March 31, 2013, pre-offering related compensation includes (1) expense resulting from cash incentive compensation payments triggered by the IPO and expense associated with the reallocation of post-IPO profits from certain pre-IPO partners to employee-partners, (2) one-time expense, resulting from the modification of the Class B common unit awards at the time of the IPO, based on the difference between the carrying value of the liability associated with the vested Class B common units immediately prior to our IPO and the value based on the offering price per share of Class A common stock in the IPO, (3) the amortization of unvested Class B common units of Artisan Partners Holdings that were granted prior to the IPO, (4) distributions to the Class B partners of Artisan Partners Holdings, (5) redemptions of Class B common units and (6) changes in the value of Class B liability awards during the period.

• For the three months ended March 31, 2014, offering related proxy expenses includes costs incurred as a result of the change of control (for purposes of the Investment Company Act and Investment Advisers Act) that occurred on March 12, 2014. We incurred costs through the first quarter of 2014 in soliciting the necessary approvals and consents from the boards and shareholders of the mutual funds that we advise or sub-advise and from our separate accounts clients, which were necessary because of the change of control.

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The following table sets forth, for the periods indicated, a reconciliation from GAAP financial measures to non-GAAP measures:

	For the Three Months Ended March 31,
	2014			2013
	(unaudited; in millions, except per share data)
Reconciliation of non-GAAP financial measures:
Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	$	8.6		$	3.0
Add back: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44.2			(407.1		)
Add back: Provision for income taxes	11.2			4.4
Add back: Pre-offering related compensation - share-based awards	23.6			333.2
Add back: Pre-offering related compensation - other	—			143.0
Add back: Offering related proxy expense	0.1			—
Less: Net gain on the valuation of contingent value rights	—			24.8
Less: Adjusted provision for income taxes	31.7			18.5
Adjusted net income (Non-GAAP)	$	56.0		$	33.2
Average shares outstanding
Class A common shares	20.2			12.7
Assumed vesting, conversion or exchange of:
Class A unvested restricted shares	1.6			—
Convertible preferred shares outstanding	1.0			2.6
Artisan Partners Holdings units outstanding (noncontrolling interest)	48.7			54.7
Adjusted shares	71.5			70.0
Adjusted net income per adjusted share (Non-GAAP)	$	0.78		$	0.47
Operating income (loss) (GAAP)	$	67.2		$	(421.3	)
Add back: Pre-offering related compensation - share-based awards	23.6			333.2
Add back: Pre-offering related compensation - other	—			143.0
Add back: Offering related proxy expense	0.1			—
Adjusted operating income (Non-GAAP)	$	90.9		$	54.9
Adjusted operating margin (Non-GAAP)	45.1		%	37.0		%
Net income attributable to Artisan Partners Asset Management Inc. (GAAP)	$	8.6		$	3.0
Add back: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44.2			(407.1		)
Add back: Pre-offering related compensation - share-based awards	23.6			333.2
Add back: Pre-offering related compensation - other	—			143.0
Add back: Offering related proxy expense	0.1			—
Less: Net gain on the valuation of contingent value rights	—			24.8
Add back: Interest expense	2.9			3.2
Add back: Provision for income taxes	11.2			4.4
Add back: Depreciation and amortization	0.7			0.7
Adjusted EBITDA (Non-GAAP)	$	91.3		$	55.6

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Liquidity and Capital Resources

Our working capital needs, including accrued incentive compensation payments, have been and are expected to be met primarily through cash generated by our operations. The following table shows our liquidity position as of March 31, 2014 and December 31, 2013. The data presented excludes Launch Equity’s cash and cash equivalents and accounts receivable as these assets are not sources of liquidity for us.

	March 31, 2014		December 31, 2013
	(unaudited)
	(dollars in millions)
Cash and cash equivalents	$	208.4	$	211.8
Accounts receivable	$	62.2	$	64.1
Undrawn commitment on revolving credit facility	$	100.0	$	100.0

We manage our cash balances in order to fund our day-to-day operations. Accounts receivable primarily represent investment management fees that have been earned, but not yet received from our clients. We perform a review of our receivables on a monthly basis to assess collectability. We also maintain a $100.0 million revolving credit facility, which was unused as of and for the three months ended March 31, 2014.

In August 2012, we issued $200.0 million in unsecured notes and entered into the $100.0 millionfive-year revolving credit facility. We used the proceeds of the notes and $90.0 million drawn from the revolving credit facility to prepay the entire then-outstanding principal amount of our prior term loan. The notes are comprised of three series, each with a balloon payment at maturity. In connection with the IPO, we paid all of the $90.0 million outstanding principal amount of loans under the revolving credit facility. The fixed interest rate on each series of unsecured notes is subject to a 100 basis point increase in the event Holdings receives a below-investment grade rating and any such increase will continue to apply until an investment grade rating is received.

These borrowings contain various restrictive covenants. Our failure to comply with any of the covenants could result in an event of default under the agreements, giving our lenders the ability to accelerate repayment of our obligations. We were in compliance with all debt covenants as of March 31, 2014.

Distributions and Dividends

In connection with the IPO, we made a cash incentive compensation payment of approximately $56.8 million to certain of our portfolio managers and distributed to our pre-IPO partners all of our retained profits as of the date of the closing of the IPO. During the March quarter of 2014, Artisan Partners Holdings distributed $131.6 million to holders of its partnership units, including APAM. During the quarter, APAM paid a quarterly dividend of $0.55 per share of Class A common stock and a special annual dividend of $1.63 per share of Class A common stock. APAM also paid a dividend of $3.00 per share of convertible preferred stock.

In future periods, we anticipate that we will distribute a significant portion of our profits to our equity holders. Our dividend policy targets the distribution of the majority of annual adjusted earnings through a quarterly dividend and, subject to firm profitability and business conditions, a special annual dividend. Although we expect to pay dividends according to our dividend policy, we may not pay dividends according to our policy or at all.

On April 22, 2014, we, acting as the general partner of Artisan Partners Holdings, declared a distribution of $30.6 million payable by Artisan Partners Holdings on May 23, 2014 to holders of its partnership units, including us, of record on May 16, 2014. In addition, our board of directors declared a quarterly dividend of $0.55 per share of Class A common stock and $0.81 per share of convertible preferred stock, both to be paid on May 30, 2014, to shareholders of record as of the close of business on May 16, 2014.

In addition to funding our normal operations, we will be required to fund amounts payable by us under the TRAs that we entered into in connection with the IPO.

Tax Receivable Agreements (“TRAs”)

In connection with the IPO, APAM entered into two TRAs, which resulted in recognition of a $405.2 million liability as of March 31, 2014. The $405.2 million liability represents 85% of the tax benefits we expect to realize from the H&F Corp Merger, our purchase of Class A units in connection with the IPO, our purchase of preferred units in November 2013, and our purchase of common and preferred units in March 2014, assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits subject to the TRAs.

36

The liability will increase upon redemptions of Holdings units or exchanges of Holdings units for our Class A common stock or convertible preferred stock, with the increase representing 85% of the estimated future tax benefits, if any, resulting from the redemptions or exchanges. We intend to fund the payment of amounts due under the TRAs out of the reduced tax payments that APAM actually realizes in respect of the attributes to which the TRAs relate.

The actual payments, and associated tax benefits, will vary depending upon a number of factors, including the timing of exchanges by the holders of Holdings units, the price of our Class A common stock or the value of our convertible preferred stock, as the case may be, at the time of the redemption or exchange, the extent to which such redemptions or exchanges are taxable, the amount and timing of the taxable income we generate in the future and the tax rate then applicable as well as the portion of our payments under the TRAs constituting imputed interest or depreciable or amortizable basis. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the TRAs. In such cases, we intend to fund those payments with cash on hand, although we may have to borrow funds depending on the amount and timing of the payments.

Cash Flows

	For the Three Months Ended March 31,
	2014			2013
	(unaudited; in millions)
Cash as of January 1	$	211.8		$	141.2
Net cash provided by (used in) operating activities	147.2			(29.0		)
Net cash provided by (used in) investing activities	(11.9		)	(2.7		)
Net cash provided by (used in) financing activities	(138.7		)	89.6
Cash as of March 31	$	208.4		$	199.1

Operating activities provided net cash of $147.2 million and used net cash of $29.0 million for the three months ended March 31, 2014 and 2013, respectively. The increase in net cash provided by operating activities was primarily driven by higher operating income in 2014 and IPO Reorganization payments made in 2013. The increase was comprised of $56.8 million IPO-related cash incentive compensation payments and $65.7 million Class B distributions paid in the March quarter of 2013, and an increase of $40.1 million in operating income, excluding share based and pre-offering related compensation expenses. Timing differences in working capital accounts also increased our operating cash flows by $19.5 million in the March quarter of 2014 compared to 2013.

Transactions associated with Launch Equity used operating cash of $1.8 million and $2.9 million during the three months ended March 31, 2014, and 2013, respectively. Nearly all of Launch Equity’s cash flows are attributable to non-controlling interests.

Investing activities consist primarily of acquiring and selling property and equipment, leasehold improvements and the purchase and sale of available-for-sale securities. Investing activities used net cash of $11.9 million and $2.7 million for the three months ended March 31, 2014 and 2013, respectively. The increase in net cash used in investing activities was primarily due to our $10 million available-for-sale investments during the March quarter of 2014 to provide seed capital for the Artisan Partners High Income Fund compared to $2 million of seed capital investments during the March quarter of 2013.

Financing activities consist primarily of partnership distributions to partners, dividend payments to holders of our Class A common stock, payments of principal on our revolving credit arrangement, proceeds from the issuance of Class A common stock in the IPO and follow-on offerings, and payments to purchase APAM convertible preferred stock and Holdings partnership units. Financing activities used net cash of $138.7 million and provided net cash of $89.6 million for the three months ended March 31, 2014 and 2013, respectively. This decrease in net cash provided by financing activities was primarily the result of net proceeds of $353.4 million provided by the IPO. The cash provided by the IPO was offset by $100.5 million profits distributions to our non-employee partners, a $90.0 million payment of principal outstanding under our revolving credit arrangement, and payments of $76.3 million for the purchase of Class A common units in connection with the IPO. For the three months ended March 31, 2014, net cash used in financing activities was primarily driven by $93.0 million of Holdings’ profits distributions and $46.8 million of dividends paid to APAM shareholders. All of the proceeds provided by the 2014 Follow-On Offering were used to purchase shares of our convertible preferred stock and subsidiary equity, as described under “Factors Impacting our Results of Operations.”

Launch Equity’s limited partners contributed $1.8 million and $3.1 million of additional capital to Launch Equity during the three months ended March 31, 2014 and 2013, respectively. Nearly all of Launch Equity’s capital is attributable to non-controlling interests.

37

Certain Contractual Obligations

As of March 31, 2014, there have been no material changes to our contractual obligations outside the ordinary course of business from those listed in the “Certain Contractual Obligations” table and related notes to the table in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 26, 2014, except, in connection with the 2014 Follow-on Offering, the TRA liability increased by $244.3 million. Amounts payable under the TRAs will increase upon exchanges of Holdings units for our Class A common stock or convertible preferred stock or sales of Holdings units to us, with the increase representing 85% of the estimated future tax benefits, if any, resulting from the exchanges or sales. The actual amount and timing of payments associated with our existing payable under the TRAs or future exchanges or sales, and associated tax benefits, will vary depending upon a number of factors as described under “Liquidity and Capital Resources.” As a result, the timing of payments by period is currently unknown. We expect to pay approximately $4.4 million related to the TRAs in 2014. We expect the estimated payments to be funded by realized tax benefits.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2014.

Critical Accounting Policies and Estimates

There have been no updates to our critical accounting policies from those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the fiscal year ended December 31, 2013.

New or Revised Accounting Standards

There have been no new or revised accounting standards from those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the fiscal year ended December 31, 2013.

38

Item 3. Qualitative and Quantitative Disclosures Regarding Market Risk

There have been no material changes in our Quantitative and Qualitative Disclosures Regarding Market Risk from those previously reported in our Form 10-K for the year ended December 31, 2013.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at March 31, 2014. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.

Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the quarter ended March 31, 2014 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

39

Part II — Other Information

Item 1. Legal Proceedings

In the normal course of business, we may be subject to various legal and administrative proceedings. Currently, there are no legal or administrative proceedings that management believes may have a material effect on our consolidated financial position or results of operations.

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our latest annual report on Form 10-K, which is accessible on the SEC’s website at www.sec.gov.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

As described in Note 9, “Stockholders' Equity”, to the Unaudited Consolidated Financial Statements included in Part I of this report, upon termination of employment with Artisan, an employee-partner’s vested Class B common units of Holdings are automatically exchanged for Class E common units, and unvested Class B common units are forfeited. The employee-partner’s shares of APAM Class B common stock are canceled and APAM issues the former employee-partner a number of shares of APAM Class C common stock equal to the former employee-partner’s number of Class E common units. The former employee-partner’s Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings. There were no such issuances during the three months ended March 31, 2014.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.	Description
2.1	Agreement and Plan of Merger between Artisan Partners Asset Management Inc. and H&F Brewer Blocker Corp.(1)
3.1	Restated Certificate of Incorporation of Artisan Partners Asset Management Inc.(1)
3.2	Amended and Restated Bylaws of Artisan Partners Asset Management Inc.(1)
10.1	Fifth Amended and Restated Limited Partnership Agreement of Artisan Partners Holdings LP(2)
10.2	Amended and Restated Resale and Registration Rights Agreement(2)
10.3	Exchange Agreement(1)
10.4	Tax Receivable Agreement (Merger)(1)
10.5	Tax Receivable Agreement (Exchanges)(1)
10.6	Stockholders Agreement(1)
10.7	Public Company Contingent Value Rights Agreement(1)
10.8	Partnership Contingent Value Rights Agreement(1)
10.9	Artisan Partners Asset Management Inc. 2013 Omnibus Incentive Compensation Plan(3)
10.10	Artisan Partners Asset Management Inc. 2013 Non-Employee Director Plan(3)
10.11	Artisan Partners Asset Management Inc. Bonus Plan(3)

40

10.12	Form of Artisan Partners Holdings LP Restated Class B Common Units Grant Agreement(4)
10.13	Employment Agreement of Andrew A. Ziegler(1)
10.14	Form of Indemnification Agreement(4)
10.15	Form of Indemnification Priority Agreement(4)
10.16	Five-Year Revolving Credit Agreement, dated as of August 16, 2012, among Artisan Partners Holdings LP, the lenders named therein and Citibank, N.A., as Administrative Agent(5)
10.17	Note Purchase Agreement, dated as of August 16, 2012, among Artisan Partners Holdings LP and the purchasers listed therein(5)
10.18	Amended and Restated Investment Advisory Agreement between Artisan Partners Limited Partnership and Artisan Partners Funds, Inc., dated March 12, 2014(6)
10.19	Form of Artisan Partners Asset Management Inc. 2013 Non-Employee Director Plan—Restricted Share Unit Award Agreement(4)
10.20	Form of Artisan Partners Asset Management Inc. 2013 Omnibus Incentive Compensation Plan-Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Artisan Partners Asset Management Inc. on June 25, 2013 (File No. 001-35826))
10.21	Unit and Share Purchase Agreement (incorporated by reference to the Registration Statement on Form S-1 filed by Artisan Partners Asset Management Inc. on October 16, 2013 (File No. 333-191739))
31.1	Certification of the Company’s Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Company’s Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following Extensible Business Reporting Language (XBRL) documents are collectively included herewith as Exhibit 101: (i) the Unaudited Condensed Consolidated Statements of Financial Condition as of March 31, 2014 and December 31, 2013; (ii) the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013; (iii) the Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2014 and 2013; (iv) the Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2014 and 2013; (v) the Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013 (vi) the Notes to Unaudited Consolidated Financial Statements as of and for the three months ended March 31, 2014 and 2013
(1)	incorporated by reference to Form 10-Q filed by Artisan Partners Asset Management Inc. on May 9, 2013 (File No. 001-35826)
(2)	incorporated by reference to Form 10-Q filed by Artisan Partners Asset Management Inc. on November 7, 2013 (File No. 001-35826)
(3)	incorporated by reference to Amendment No. 3 to the Registration Statement on Form S-1 filed by Artisan Partners Asset Management Inc. on February 14, 2013 (File No. 333-184686)
(4)	incorporated by reference to Amendment No. 2 to the Registration Statement on Form S-1 filed by Artisan Partners Asset Management Inc. on January 18, 2013 (File No. 333-184686)
(5)	incorporated by reference to the Registration Statement on Form S-1 filed by Artisan Partners Asset Management Inc. on November 1, 2012 (File No. 333-184686)
(6)	incorporated by reference to the Registration Statement on Form S-1 filed by Artisan Partners Asset Management Inc. on March 19, 2014 (File No. 333-194684)

41

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Artisan Partners Asset Management Inc.

Dated: May 7, 2014

By:

/s/ Eric R. Colson

Eric R. Colson

President and Chief Executive Officer and Director

(principal executive officer)

/s/ Charles J. Daley, Jr.

Charles J. Daley, Jr.

Executive Vice President, Chief Financial Officer and Treasurer

(principal financial and accounting officer)

42

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Eric R. Colson, certify that:

1. I have reviewed this report on Form 10-Q of Artisan Partners Asset Management Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over financial reporting (as defined in

     Exchange Act Rule 13a-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period

covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Eric R. Colson

Eric R. Colson

President and Chief Executive Officer and Director

(principal executive officer)

Date: May 7, 2014

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Charles J. Daley, Jr., certify that:

1. I have reviewed this report on Form 10-Q of Artisan Partners Asset Management Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rule 13a-15(e)) and internal control over financial reporting (as defined in

     Exchange Act Rule 13a-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period

covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Charles J. Daley, Jr.

Charles J. Daley, Jr.

Executive Vice President, Chief Financial Officer and Treasurer

(principal financial and accounting officer)

Date: May 7, 2014

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Eric R. Colson, the President and Chief Executive Officer and Director of Artisan Partners Asset Management Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

• The Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

• The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Eric R. Colson

Eric R. Colson

President and Chief Executive Officer and Director

(principal executive officer)

Date: May 7, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles J. Daley, Jr., the Executive Vice President, Chief Financial Officer and Treasurer of Artisan Partners Asset Management Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

• The Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

• The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Charles J. Daley, Jr.

Charles J. Daley, Jr.

Executive Vice President, Chief Financial Officer and Treasurer

(principal financial and accounting officer)

Date: May 7, 2014

XML

Fair Value Measurements - Fair value hierarchy of assets and liabilities (Details) (Recurring, USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Total Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 60,002	$ 105,001
Mutual funds	17,911	7,804
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	60,002	105,001
Mutual funds	17,911	7,804
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Mutual funds	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Mutual funds	$ 0	$ 0

XML

Income Taxes and Related Payments - Additional information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%
Approximate percentage of earnings not subject to income taxes	62.00%
TRA percent of savings to be paid to shareholders	85.00%
Tax Receivable Agreement Payment Period	125
Establishment of deferred tax assets	$ 287,367		$ 70,862
Establishment of amounts payable under tax receivable agreements	244,262		53,449
Deferred tax assets	468,440	[1]		183,858	[1]
Amounts payable under tax receivable agreements	$ 405,207			$ 160,663

[1] Represents the unamortized step-up of tax basis from the H&F Corp Merger and the purchase of common and preferred units by APAM.

XML

Stockholders' Equity (Details) (USD $)	1 Months Ended	3 Months Ended				0 Months Ended	3 Months Ended		3 Months Ended	0 Months Ended				0 Months Ended				0 Months Ended			3 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Class B Liability Awards	Mar. 31, 2014 Restricted Stock [Member]	Mar. 12, 2014 Class A Common Stock	Mar. 31, 2014 Class A Common Stock votes	Dec. 31, 2013 Class A Common Stock	Mar. 31, 2014 Class A Common Stock Restricted Stock [Member]	Mar. 12, 2014 Class B Common Stock	Mar. 31, 2014 Class B Common Stock votes		Dec. 31, 2013 Class B Common Stock	Mar. 12, 2014 Class C Common Stock	Mar. 31, 2014 Class C Common Stock votes		Dec. 31, 2013 Class C Common Stock	Mar. 12, 2014 Convertible preferred stock	Mar. 31, 2014 Convertible preferred stock votes	Dec. 31, 2013 Convertible preferred stock	Mar. 31, 2014 Distributions on liability awards Class B Liability Awards	Mar. 31, 2013 Distributions on liability awards Class B Liability Awards	Mar. 31, 2014 Artisan Partners Asset Management [Member]
Class of Stock [Line Items]
Dividends declared per Class A common share	$ 0.00	$ 2.18
Preferred Stock, Dividends, Per Share, Cash Paid		$ 3.00
Stock Issued During Period, Shares, New Issues				0		9,284,337	9,326,149		41,812
Partnership distributions		$ 131,629,000	$ 166,241,000																		$ 0	$ 65,727,000
Pre-offering related compensation - other		0	143,035,000																			65,727,000
Common stock, shares authorized							500,000,000	500,000,000			200,000,000		200,000,000		400,000,000		400,000,000
Common stock, shares outstanding					1,616,969		29,133,585	19,807,436			21,566,436		25,271,889		20,370,787		25,206,554
Convertible preferred stock, shares authorized																			15,000,000	15,000,000
Convertible preferred stock, shares outstanding																			455,011	1,198,128
Common stock votes per share							1				5	[1]			1	[1]
Common stock, par value per share							$ 0.01	$ 0.01			$ 0.01		$ 0.01		$ 0.01		$ 0.01
Preferred stock votes per share																			1
Convertible preferred stock, par value per share																			$ 0.01	$ 0.01
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		6,970
Exchange ratio to common stock							one-for-one
Stock Repurchased and Retired During Period, Shares										3,705,453				4,835,767				743,117
Distribution Made to Limited Partner, Cash Distributions Paid																							$ 38,600,000

[1] Each of the Company’s employees to whom Artisan has granted equity has entered into a stockholders agreement with respect to all shares of APAM common stock they have acquired from the Company and any shares they may acquire from the Company in the future, pursuant to which they granted an irrevocable voting proxy to a Stockholders Committee. As of March 31, 2014, Artisan’s employees held 1,616,969 shares of Class A common stock subject to the agreement and all 21,566,436 outstanding shares of Class B common stock.

XML

Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Unrealized gain on investments	$ 455	$ 303
Foreign currency translation	127	75
Accumulated other comprehensive income (loss)	$ 582	$ 378

XML

Variable and Voting Interest Entities - Condensed Consolidating Statements of Operations (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended
	Mar. 31, 2013	Mar. 12, 2013	Mar. 31, 2014	Mar. 31, 2013
Total revenues			$ 201,792	$ 148,223
Total operating expenses			134,640	569,537
Operating income			67,152	(421,314)
Non-operating income (loss)			(3,159)	21,590
Net gain (loss) of Launch Equity			(598)	4,779
Total non-operating income (loss)			(3,757)	26,369
Income (loss) before income taxes			63,395	(394,945)
Provision for income taxes			11,208	4,449
Net income (loss)	34,948	(434,342)	52,187	(399,394)
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings			44,149	(407,123)
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity			(598)	4,779
Net income attributable to Artisan Partners Asset Management Inc.	2,950		8,636	2,950
Eliminations
Total revenues			(125)	(104)
Total operating expenses			(125)	(104)
Operating income			0	0
Non-operating income (loss)				0
Net gain (loss) of Launch Equity				0
Total non-operating income (loss)			0	0
Income (loss) before income taxes			0	0
Provision for income taxes				0
Net income (loss)			0	0
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings				0
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity				0
Net income attributable to Artisan Partners Asset Management Inc.			0	0
Before Consolidation
Total revenues			201,917	148,327
Total operating expenses			134,765	569,641
Operating income			67,152	(421,314)
Non-operating income (loss)			(3,159)	21,590
Net gain (loss) of Launch Equity				0
Total non-operating income (loss)			(3,159)	21,590
Income (loss) before income taxes			63,993	(399,724)
Provision for income taxes			11,208	4,449
Net income (loss)			52,785	(404,173)
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings			44,149	(407,123)
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity				0
Net income attributable to Artisan Partners Asset Management Inc.			8,636	2,950
Launch Equity
Total revenues				0
Total operating expenses				0
Operating income			0	0
Non-operating income (loss)				0
Net gain (loss) of Launch Equity			(598)	4,779
Total non-operating income (loss)			(598)	4,779
Income (loss) before income taxes			(598)	4,779
Provision for income taxes				0
Net income (loss)			(598)	4,779
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings				0
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity			(598)	4,779
Net income attributable to Artisan Partners Asset Management Inc.			$ 0	$ 0

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Income Taxes and Related Payments (Tables)

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Components of the provision for income taxes

Components of the provision for income taxes consist of the following:

	For the Three Months Ended March 31,
	2014			2013
Current:
Federal	$	7,610		$	1,177
State and local	981			544
Foreign	77			82
Total	8,668			1,803
Deferred:
Federal	2,776			2,588
State and local	(236		)	58
Total	2,540			2,646
Income tax expense	$	11,208		$	4,449

Components of deferred tax assets

Net deferred tax assets comprise the following:

	As of March 31, 2014		As of December 31, 2013
Deferred tax assets:
Amortizable basis (1)	$	468,440	$	183,858
Other (2)	6,349		4,049
Total deferred tax assets	474,789		187,907
Less: valuation allowance (3)	—		—
Net deferred tax assets	$	474,789	$	187,907
(1) Represents the unamortized step-up of tax basis from the H&F Corp Merger and the purchase of common and preferred units by APAM.
(2) Represents the net deferred tax assets associated with the H&F Corp Merger and other miscellaneous deferred tax assets.
(3) Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.

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Earnings Per Share - Antidilutive securities excluded from the computation of net income per share (Details) (USD $)	1 Months Ended	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2014 Limited Partnership Units	Mar. 31, 2013 Limited Partnership Units	Mar. 31, 2014 Class A Common Stock	Dec. 31, 2013 Class A Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive Securities, Effect on Basic Earnings Per Share	$ 2,565,463	$ 0
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			41,937,223	54,713,763
Common stock, shares outstanding					29,133,585	19,807,436

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The accompanying financial statements are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of such consolidated financial statements have been included. Such interim results are not necessarily indicative of full year results.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting and accordingly they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. As a result, the interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in APAM’s latest annual report on Form 10-K.

The accompanying financial statements were prepared in accordance with U.S. GAAP and related rules and regulations of the SEC. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates or assumptions.

Because APAM and Holdings were under common control at the time of the IPO Reorganization, APAM’s acquisition of control of Holdings was accounted for as a transaction among entities under common control. The consolidated financial statements of APAM reflect the following:

• Statements of Financial Condition - The assets, liabilities and equity of Holdings and of APAM have been carried forward at their historical carrying values. The historical partners’ equity or deficit of Holdings is reflected as a noncontrolling interest.

• Statements of Operations, Comprehensive Income and Cash Flows - The historical consolidated statements of Holdings have been consolidated with the statements of operations, comprehensive income and cash flows of APAM.

Principles of consolidation

Principles of consolidation

Artisan’s policy is to consolidate all subsidiaries or other entities in which it has a controlling financial interest and variable interest entities (“VIEs”) of which Artisan is deemed to be the primary beneficiary. The primary beneficiary is deemed to be the entity that has the power to govern the financial and operating policies of the subsidiary so as to obtain benefits from its activities. The consolidated financial statements include the accounts of APAM, all subsidiaries or other entities in which APAM has a direct or indirect controlling financial interest and VIEs of which Artisan is deemed to be the primary beneficiary. All material intercompany balances have been eliminated in consolidation.

Artisan’s wholly-owned subsidiary, Artisan Partners Alternative Investments GP LLC, is the general partner of Artisan Partners Launch Equity LP (“Launch Equity”), a private investment partnership that is considered a VIE. Launch Equity is considered an investment company and therefore is accounted for under ASC Topic 946, Financial Services – Investment Companies. Artisan has retained the specialized industry accounting principles of this investment company in its Consolidated Financial Statements. See Note 8, “Variable and Voting Interest Entities”for additional details.

The Company makes initial seed investments in sponsored investment portfolios at the portfolio’s formation. If the seed investment results in a controlling financial interest, APAM consolidates the investment, and the underlying individual securities are accounted for as trading securities. Seed investments in which the Company does not have a controlling financial interest are classified as available-for-sale investments. As of March 31, 2014, APAM does not have a controlling financial interest in any of its seed investments.

Recent accounting pronouncements

Recent accounting pronouncements

In March 2013, the FASB issued ASU 2013-05, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The ASU clarifies the interaction between ASC 810-10, Consolidation-Overall, and ASC 830-30, Foreign Currency Matters-Translation of Financial Statements, when releasing the cumulative translation adjustment into net income when a parent either sells a part or all of its investment ina foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU was adopted prospectively on January 1, 2014 and did not have an impact on the Company’s consolidated financial statements.

In June 2013, the FASB issued ASU 2013-08, Investment Companies (Topic 946). The ASU changes the approach to the investment company assessment in Topic 946, clarifying the characteristics of an investment company and provides comprehensive guidance for assessing whether an entity is an investment company. This update would also require an investment company to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting and to include additional disclosures. The ASU was adopted prospectively on January 1, 2014 and did not have an impact on the Company’s consolidated financial statements.

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Compensation and Benefits - Activity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		3 Months Ended		0 Months Ended	3 Months Ended
	Mar. 31, 2014 Class B Liability Awards	Dec. 31, 2013 Class B Liability Awards	Mar. 31, 2014 Restricted Stock [Member]	Dec. 31, 2013 Restricted Stock [Member]	Mar. 12, 2014 Class A Common Stock	Mar. 31, 2014 Class A Common Stock	Mar. 31, 2014 Class A Common Stock Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 128,239		$ 70,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested Class B Shares	6,582,964	7,249,842	1,616,969	1,575,157
Granted (shares)	0				9,284,337	9,326,149	41,812
Forfeited (shares)	0		0
Vested (shares)	666,878		0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted average grant date fair value	$ 30.00	$ 30.00	$ 52.85	$ 52.36
Granted, weighted average grant date fair value	$ 0		$ 71.59
Forfeited, weighted average grant date fair value	$ 0		$ 0
Vested, weighted average grant date fair value	$ 30		$ 0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 9 months 8 days		4 years 4 months 7 days

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Borrowings - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Debt Instrument [Line Items]
Interest expense incurred on debt and credit facilities	$ 2.8	$ 3.1
Level 2 | Recurring
Debt Instrument [Line Items]
Borrowings fair value	$ 201.6

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Organization and nature of business (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended			0 Months Ended	3 Months Ended	0 Months Ended		3 Months Ended	0 Months Ended
	Mar. 31, 2014 Investment_strategies investment_teams	Mar. 31, 2013	Mar. 12, 2014	Mar. 12, 2014 Class A Common Stock	Mar. 31, 2014 Class A Common Stock	Mar. 12, 2014 Limited Partnership Units	Mar. 12, 2014 Subsidiary Preferred Stock [Member]	Mar. 31, 2014 Subsidiary Preferred Stock [Member]	Mar. 12, 2014 Convertible preferred stock	Mar. 12, 2014 General Partnership Units [Member]
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of autonomous investment teams	6
Number of investment strategies	14
Class of Stock [Line Items]
Stock Repurchased and Retired During Period, Shares						6,284,337	2,256,883		743,117
Share Price			$ 62.00
Less: Convertible preferred stock deemed dividends	$ 22,694							$ 25,155
Stock Issued During Period, Shares, New Issues				9,284,337	9,326,149					9,284,337
Establishment of amounts payable under tax receivable agreements	244,262	53,449
APAM economic interest in Artisan Partners Holdings LP (as a percent)	41.00%		29.00%
Establishment of deferred tax assets	$ 287,367	$ 70,862

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Income Taxes and Related Payments - Components of provision for income taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income tax disclosures [Abstract]
Federal	$ 7,610	$ 1,177
State and local	981	544
Foreign	77	82
Total	8,668	1,803
Federal	2,776	2,588
State and local	(236)	58
Total	2,540	2,646
Income tax expense	$ 11,208	$ 4,449

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Variable and Voting Interest Entities - Fair Value Hierarchy of Assets and Liabilities of Consolidated Investment Products (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities of Launch Equity	$ 60,528	$ 63,364
Securities sold, not yet purchased of Launch Equity	38,222	31,990
Launch Equity | Recurring | Total Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities of Launch Equity	60,528	63,364
Securities sold, not yet purchased of Launch Equity	38,222	31,990
Launch Equity | Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities of Launch Equity	60,528	63,364
Securities sold, not yet purchased of Launch Equity	38,222	31,990
Launch Equity | Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities of Launch Equity	0	0
Securities sold, not yet purchased of Launch Equity	0	0
Launch Equity | Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities of Launch Equity	0	0
Securities sold, not yet purchased of Launch Equity	$ 0	$ 0

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Organization and nature of business

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and nature of business

Note 1. Organization and nature of business

Organization

On March 12, 2013, Artisan Partners Asset Management Inc. (“APAM”) completed its initial public offering (the “IPO”). APAM was formed in 2011 as a subsidiary of Artisan Partners Holdings LP (“Artisan Partners Holdings” or “Holdings”). APAM was formed for the purpose of becoming the general partner of Holdings in connection with the IPO. The reorganization (“IPO Reorganization”) established the necessary corporate structure to complete the IPO while at the same time preserving the ability of the firm to conduct operations through Holdings and its subsidiaries.

As part of the IPO Reorganization, APAM became the sole general partner of Holdings. As the sole general partner, APAM controls the business and affairs of Holdings. As a result, APAM consolidates Holdings’ financial statements and records a noncontrolling interest for the economic interests in Holdings held by the limited partners of Holdings. At March 31, 2014, APAM’s total economic interest in Holdings approximated 41% of Holdings’ economics.

Artisan Partners Asset Management has been allocated a part of Artisan Partners Holdings’ net income since March 12, 2013, when it became Artisan Partners Holdings’ general partner. APAM and its subsidiaries are hereafter referred to collectively as “Artisan” or the “Company”.

Nature of Business

Artisan is an investment management firm focused on providing high-value added, active investment strategies to sophisticated clients globally. Artisan’s operations are conducted through Artisan Partners Holdings and its subsidiaries.

Artisan has six autonomous investment teams that oversee fourteen distinct U.S., non-U.S. and global investment strategies. During the March quarter of 2014 Artisan launched its fourteenth investment strategy, the Artisan Partners High Income strategy, which is managed by the firm’s Credit team.

Each strategy is offered through multiple investment vehicles to accommodate a broad range of client mandates. Artisan offers its investment management services primarily to institutions and through intermediaries that operate with institutional-like decision-making processes and have long-term investment horizons.

2014 Follow-On Offering

On March 12, 2014, APAM completed a registered public offering of 9,284,337 shares of Class A common stock (the “2014 Follow-on Offering”) and utilized all of the net proceeds to purchase an aggregate of 6,284,337 common units and 2,256,883 preferred units of Artisan Partners Holdings and 743,117 shares of APAM’s convertible preferred stock, at a price per unit or share, as applicable, equal to $62.00 less the underwriting discount per share. The offering and subsequent purchase of shares and units had the following impact on the consolidated financial statements:

• APAM received 9,284,337 general partnership (“GP”) units of Holdings, and APAM’s ownership interest in Holdings increased from 29% to 41%. See Note 7, “Noncontrolling interest - Holdings” for the impact of the change in ownership.

• APAM’s purchase of common and preferred units of Holdings with a portion of the net proceeds resulted in an increase to deferred tax assets of approximately $287.4 million and an increase in amounts payable under tax receivable agreements of approximately $244.3 million.

• The purchase price of the convertible preferred stock exceeded its carrying value on APAM’s consolidated balance sheet by $22.7 million, which is considered a deemed dividend and is subtracted from net income to calculate income available to common stockholders in the calculation of earnings per share. The purchase of the preferred units of Holdings resulted in a similar deemed dividend, which reduced net income available to common stockholders by an additional $25.2 million in the calculation of earnings per share.

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Derivative Instruments - Income statement disclosures (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Net gain on the valuation of contingent value rights	$ 0	$ 24,800

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments, Gain (Loss) [Table Text Block]

The following table presents gains (losses) recognized on derivative instruments for the three months ended March 31, 2014 and 2013:

		Three months ended March 31,
		2014				2013
	Income Statement Classification	Gains		Losses		Gains		Losses
Contingent value rights	Net gain on the valuation of contingent value rights	$	—	$	—	$	24,800	$	—
Total		$	—	$	—	$	24,800	$	—

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Borrowings (Tables)

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Schedule of borrowings

Artisan’s borrowings consist of the following as of March 31, 2014 and December 31, 2013:

	Maturity	Outstanding Balance		Interest Rate Per Annum
Revolving credit agreement	August 2017	—		NA
Senior notes
Series A	August 2017	60,000		4.98	%
Series B	August 2019	50,000		5.32	%
Series C	August 2022	90,000		5.82	%
Total borrowings		$	200,000

Aggregate maturities of debt obligations

As of March 31, 2014, the aggregate maturities of debt obligations, based on their contractual terms, are as follows:

2014	$	—
2015	—
2016	—
2017	60,000
Thereafter	140,000
	$	200,000

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Earnings Per Share - Computation of basic and diluted net income (loss) per share (Details) (USD $)	1 Months Ended	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income (loss) allocable to APAM	$ 2,950,000	$ 8,636,000	$ 2,950,000
Less: Convertible preferred stock deemed dividends		(22,694,000)
Participating Policies, Additional Income Allocated	(495,000)	(6,980,000)
Net Income (Loss) Available to Common Stockholders, Basic	2,455,000	(46,193,000)
Weighted average shares outstanding - basic	12,728,949	20,214,242
Dilutive Securities, Effect on Basic Earnings Per Share	2,565,463	0
Weighted Average Number of Shares Outstanding, Diluted	15,294,412	20,214,242
Earnings Per Share, Basic	$ 0.19	$ (2.29)
Subsidiary Preferred Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Less: Convertible preferred stock deemed dividends		$ (25,155,000)
Restricted Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Common stock, shares outstanding		1,616,969

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Noncontrolling Interest - Holdings (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		3 Months Ended				0 Months Ended			3 Months Ended	0 Months Ended	3 Months Ended	0 Months Ended
	Mar. 31, 2014	Mar. 12, 2014	Mar. 31, 2014 Additional Paid-in Capital	Mar. 31, 2014 Noncontrolling Interest	Mar. 31, 2014 Accumulated Other Comprehensive Income	Mar. 31, 2014 Deferred Tax Assets [Member]	Mar. 12, 2014 Preferred Stock	Mar. 12, 2014 Limited Partnership Units	Mar. 12, 2014 Class A Common Stock	Mar. 31, 2014 Class A Common Stock	Mar. 12, 2014 General Partnership Units [Member]	Mar. 31, 2014 Restricted Stock [Member] Class A Common Stock	Jan. 22, 2014 Restricted Stock [Member] General Partnership Units [Member]
Noncontrolling Interest [Line Items]
Stock Repurchased and Retired During Period, Shares							3,000,000	6,284,337
Cumulative impact of changes in ownership, net of tax	$ (78)		$ (3,456)	$ 3,201	$ 177	$ 2,064
AOCI Adjustment to Reflect Changes in Ownership				$ 255
Stock Issued During Period, Shares, New Issues									9,284,337	9,326,149	9,284,337	41,812	41,812
APAM economic interest in Artisan Partners Holdings LP (as a percent)	41.00%	29.00%

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Variable and Voting Interest Entities (Tables)

3 Months Ended

Mar. 31, 2014

Variable Interest Entities Disclosure [Abstract]

Condensed Consolidating Statements of Financial Condition

Condensed Consolidating Statements of Financial Condition
	As of March 31, 2014									As of December 31, 2013
	Before Consolidation		Launch Equity		Eliminations			As Reported		Before Consolidation		Launch Equity		Eliminations			As Reported
Cash and cash equivalents	$	208,371	$	—	$	—		$	208,371	$	211,839	$	—	$	—		$	211,839
Cash and cash equivalents of Launch Equity	—		30,263		—			30,263		—		19,156		—			19,156
Accounts receivable	62,219		—		—			62,219		64,110		—		—			64,110
Accounts receivable of Launch Equity	—		—		—			—		—		7,428		—			7,428
Investment securities of Launch Equity	1		60,528		(1		)	60,528		1		63,364		(1		)	63,364
Other assets	515,747		—		—			515,747		215,501		—		—			215,501
Total assets	$	786,338	$	90,791	$	(1	)	$	877,128	$	491,451	$	89,948	$	(1	)	$	581,398
Accounts payable of Launch Equity	$	—	$	869	$	—		$	869	$	—	$	7,485	$	—		$	7,485
Securities sold, not yet purchased of Launch Equity	—		38,222		—			38,222		—		31,990		—			31,990
Other liabilities	718,459		—		—			718,459		409,612		—		—			409,612
Total liabilities	718,459		39,091		—			757,550		409,612		39,475		—			449,087
Total stockholders’ equity	55,616		—		—			55,616		43,779		—		—			43,779
Noncontrolling interest - Artisan Partners Holdings	12,263		1		(1		)	12,263		38,060		1		(1		)	38,060
Noncontrolling interest - Launch Equity	—		51,699		—			51,699		—		50,472		—			50,472
Total equity	67,879		51,700		(1		)	119,578		81,839		50,473		(1		)	132,311
Total liabilities and equity	$	786,338	$	90,791	$	(1	)	$	877,128	$	491,451	$	89,948	$	(1	)	$	581,398

Condensed Consolidating Statements of Operations

Condensed Consolidating Statements of Operations
	Three Months Ended
	March 31, 2014												March 31, 2013
	Before Consolidation			Launch Equity			Eliminations			As Reported			Before Consolidation			Launch Equity		Eliminations			As Reported
Total revenues	$	201,917		$	—		$	(125	)	$	201,792		$	148,327		$	—	$	(104	)	$	148,223
Total operating expenses	134,765			—			(125		)	134,640			569,641			—		(104		)	569,537
Operating income (loss)	67,152			—			—			67,152			(421,314		)	—		—			(421,314		)
Non-operating income (loss)	(3,159		)	—			—			(3,159		)	21,590			—		—			21,590
Net gain (loss) of Launch Equity	—			(598		)	—			(598		)	—			4,779		—			4,779
Total non-operating income (loss)	(3,159		)	(598		)	—			(3,757		)	21,590			4,779		—			26,369
Income (loss) before income taxes	63,993			(598		)	—			63,395			(399,724		)	4,779		—			(394,945		)
Provision for income taxes	11,208			—			—			11,208			4,449			—		—			4,449
Net income (loss)	52,785			(598		)	—			52,187			(404,173		)	4,779		—			(399,394		)
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44,149			—			—			44,149			(407,123		)	—		—			(407,123		)
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity	—			(598		)	—			(598		)	—			4,779		—			4,779
Net income attributable to Artisan Partners Asset Management Inc.	$	8,636		$	—		$	—		$	8,636		$	2,950		$	—	$	—		$	2,950

Launch Equity

Variable Interest Entity [Line Items]

Fair value hierarchy of assets and liabilities

The following table presents the fair value hierarchy levels of investments and liabilities held by Launch Equity which are measured at fair value as of March 31, 2014 and December 31, 2013:

	Assets and Liabilities at Fair Value:
	Total		Level 1		Level 2		Level 3
March 31, 2014
Assets
Investment securities – long position	$	60,528	$	60,528	$	—	$	—
Liabilities
Investment securities – short position	$	38,222	$	38,222	$	—	$	—
December 31, 2013
Assets
Investment securities – long position	$	63,364	$	63,364	$	—	$	—
Liabilities
Investment securities – short position	$	31,990	$	31,990	$	—	$	—

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Authorized and outstanding equity

As of March 31, 2014 and December 31, 2013, APAM had the following authorized and outstanding equity:

		Outstanding
	Authorized	March 31, 2014	December 31, 2013	Voting Rights (1)	Economic Rights(2)
Common shares
Class A, par value $0.01 per share	500,000,000	29,133,585	19,807,436	1 vote per share	Proportionate
Class B, par value $0.01 per share	200,000,000	21,566,436	25,271,889	5 votes per share	None
Class C, par value $0.01 per share	400,000,000	20,370,787	25,206,554	1 vote per share	None
Preferred shares
Convertible preferred, par value $0.01 per share	15,000,000	455,011	1,198,128	1 vote per share	Proportionate
(1) Each of the Company’s employees to whom Artisan has granted equity have entered into a stockholders agreement with respect to all shares of APAM common stock they have acquired from the Company and any shares they may acquire from the Company in the future, pursuant to which they granted an irrevocable voting proxy to a Stockholders Committee. As of March 31, 2014, Artisan’s employees held 1,616,969 shares of Class A common stock subject to the agreement and all 21,566,436 outstanding shares of Class B common stock.
(2) The holders of preferred units of Holdings are entitled to preferential distributions in the case of a partial capital event or upon dissolution of Holdings. In the case of any distributions on the preferred units, prior to paying any dividends on the Class A common stock, APAM must pay the holders of convertible preferred stock a dividend equal to the distribution APAM received in respect of the preferred units it holds, net of taxes, if any.

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Unaudited Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities
Net income (loss) before noncontrolling interests	$ 52,187	$ (399,394)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	693	698
Deferred income taxes	2,540	2,646
Net gain on the valuation of contingent value rights	0	(24,800)
(Gains) losses of Launch Equity, net	598	(4,779)
Proceeds from sale of investments by Launch Equity	56,880	22,204
Purchase of investments by Launch Equity	(48,094)	(22,109)
Loss on disposal of property and equipment	5	1
Amortization of debt issuance costs	112	112
Share-based compensation	28,278	576,969
Change in assets and liabilities resulting in an increase (decrease) in cash:
Net change in operating assets and liabilities of Launch Equity	(10,611)	(3,013)
Accounts receivable	1,891	(5,459)
Prepaid expenses and other assets	(1,442)	(263)
Accounts payable and accrued expenses	67,634	54,434
Class B liability awards	(3,459)	(226,177)
Deferred lease obligations	10	(71)
Net cash (used in) provided by operating activities	147,222	(29,001)
Cash flows from investing activities
Acquisition of property and equipment	(990)	(455)
Leasehold improvements	(949)	(199)
Proceeds from Sale of Property, Plant, and Equipment	4	0
Purchase of Investment Securities	(10,000)	(2,000)
Net cash used in investing activities	(11,935)	(2,654)
Cash flows from financing activities
Partnership distributions	(93,005)	(100,530)
Dividends Paid	(46,778)	0
Change in other liabilities	(16)	(16)
Repayment under revolving credit facility	0	(90,000)
Net proceeds from issuance of common stock	554,129	356,579
Payment of costs directly associated with the issuance of Class A common stock	(781)	(3,165)
Purchase of preferred stock and subsidiary equity	(554,129)	0
Purchase of Class A common units	0	(76,319)
Capital invested into Launch Equity	1,825	3,050
Net cash provided by (used in) financing activities	(138,755)	89,599
Net increase (decrease) in cash and cash equivalents	(3,468)	57,944
Cash and cash equivalents
Beginning of period	211,839	141,159
End of period	208,371	199,103
Noncash activity:
Establishment of deferred tax assets	287,367	70,862
Establishment of amounts payable under tax receivable agreements	244,262	53,449
Establishment of contingent value rights	0	55,440
Preferred Stock
Noncash activity:
Issuance of preferred stock	$ 0	$ 74,748

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Compensation and Benefits (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Components of compensation cost

	For the Three Months Ended March 31,
	2014		2013
Salaries, incentive compensation and benefits (1)	$	81,597	$	72,680
Restricted share compensation expense	4,258		—
Total salaries, incentive compensation and benefits	85,855		72,680
Pre-offering related compensation - share-based awards	23,637		333,231
Pre-offering related compensation - other	—		143,035
Total compensation and benefits	$	109,492	$	548,946
(1) Excluding restricted share compensation expense

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

The following table summarizes the restricted share activity for the three months ended March 31, 2014:

	Weighted-Average Grant Date Fair Value		Number of Awards
Unvested at December 31, 2013	$	52.36	1,575,157
Granted	$	71.59	41,812
Forfeited	—		—
Vested	—		—
Unvested at March 31, 2014	$	52.85	1,616,969

Schedule of pre-offering related compensation costs

Pre-offering related compensation consists of the following:

	For the Three Months Ended March 31,
	2014		2013
Change in value of Class B liability awards	$	—	$	41,942
Class B award modification expense	—		287,292
Amortization expense on pre-offering Class B awards	23,637		3,997
Pre-offering related compensation - share-based awards	23,637		333,231
Pre-offering related cash incentive compensation	—		56,788
Pre-offering related bonus make-whole compensation	—		20,520
Distributions on Class B liability awards	—		65,727
Pre-offering related compensation - other	—		143,035
Total pre-offering related compensation	$	23,637	$	476,266

Activity related to unvested Clas B awards

The following table summarizes the activity related to unvested Class B awards for the three months ended March 31, 2014:

	Weighted-Average Grant Date Fair Value		Number of Class B Awards
Unvested Class B awards at January 1, 2014	$	30.00	7,249,842
Granted	—		—
Forfeited	—		—
Vested	$	30.00	(666,878	)
Unvested at March 31, 2014	$	30.00	6,582,964

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Borrowings - Components of Borrowings (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Total outstanding balance	$ 200,000	$ 200,000
Senior notes | Series A
Debt Instrument [Line Items]
Total outstanding balance	60,000	60,000
Interest rate per annum	4.98%	4.98%
Senior notes | Series B
Debt Instrument [Line Items]
Total outstanding balance	50,000	50,000
Interest rate per annum	5.32%	5.32%
Senior notes | Series C
Debt Instrument [Line Items]
Total outstanding balance	90,000	90,000
Interest rate per annum	5.82%	5.82%
Revolving credit agreement
Debt Instrument [Line Items]
Total outstanding balance	$ 0	$ 0

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Income Taxes and Related Payments - Components of deferred tax assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Deferred tax assets:
Step-up of tax basis	$ 468,440	[1]	$ 183,858	[1]
Other	6,349	[2]	4,049	[2]
Total deferred tax assets	474,789		187,907
Less: valuation allowance	0		0
Deferred tax assets	$ 474,789		$ 187,907

[1] Represents the unamortized step-up of tax basis from the H&F Corp Merger and the purchase of common and preferred units by APAM.

[2] Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.

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Unaudited Consolidated Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
ASSETS
Cash and cash equivalents	$ 208,371	$ 211,839
Cash and cash equivalents of Launch Equity	30,263	19,156
Accounts receivable	62,219	64,110
Accounts receivable of Launch Equity	0	7,428
Investment securities	17,911	7,804
Investment securities of Launch Equity	60,528	63,364
Property and equipment, net	9,998	8,760
Deferred tax assets	474,789	187,907
Prepaid expenses and other assets	13,049	11,030
Total assets	877,128	581,398
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses, and other	48,672	45,369
Accrued incentive compensation	64,580	3,580
Borrowings	200,000	200,000
Amounts payable under tax receivable agreements	405,207	160,663
Accounts payable of Launch Equity	869	7,485
Securities sold, not yet purchased of Launch Equity	38,222	31,990
Total liabilities	757,550	449,087
Commitments and Contingencies
Additional paid-in capital	65,485	6,388
Retained earnings (deficit)	(24,419)	1,401
Accumulated other comprehensive income (loss)	582	378
Total stockholders’ equity	55,616	43,779
Noncontrolling interest - Artisan Partners Holdings	12,263	38,060
Noncontrolling interest - Launch Equity	51,699	50,472
Total equity	119,578	132,311
Total liabilities and equity	877,128	581,398
Class A Common Stock
LIABILITIES AND STOCKHOLDERS' EQUITY
Common stock	291	198
Class B Common Stock
LIABILITIES AND STOCKHOLDERS' EQUITY
Common stock	216	253
Class C Common Stock
LIABILITIES AND STOCKHOLDERS' EQUITY
Common stock	204	252
Convertible preferred stock
LIABILITIES AND STOCKHOLDERS' EQUITY
Convertible preferred stock	$ 13,257	$ 34,909

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Variable and Voting Interest Entities - Condensed Consolidating Statements of Financial Condition (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Mar. 12, 2013	Dec. 31, 2012
Cash and cash equivalents	$ 208,371	$ 211,839	$ 199,103		$ 141,159
Cash and cash equivalents of Launch Equity	30,263	19,156
Accounts receivable	62,219	64,110
Accounts receivable of Launch Equity	0	7,428
Investment securities of Launch Equity	60,528	63,364
Other assets	515,747	215,501
Total assets	877,128	581,398
Accounts payable of Launch Equity	869	7,485
Securities sold, not yet purchased of Launch Equity	38,222	31,990
Other liabilities	718,459	409,612
Total liabilities	757,550	449,087
Total stockholders' equity	55,616	43,779
Noncontrolling interest - Artisan Partners Holdings	12,263	38,060
Noncontrolling interest - Launch Equity	51,699	50,472
Total equity	119,578	132,311	5,750	(332,297)	(672,715)
Total liabilities and equity	877,128	581,398
Eliminations
Cash and cash equivalents		0
Cash and cash equivalents of Launch Equity		0
Accounts receivable		0
Accounts receivable of Launch Equity		0
Investment securities of Launch Equity	(1)	(1)
Other assets		0
Total assets	(1)	(1)
Accounts payable of Launch Equity		0
Securities sold, not yet purchased of Launch Equity		0
Other liabilities		0
Total liabilities	0	0
Noncontrolling interest - Artisan Partners Holdings	(1)	(1)
Noncontrolling interest - Launch Equity		0
Total equity	(1)	(1)
Total liabilities and equity	(1)	(1)
Before Consolidation
Parent Investment in Consolidated Variable Interest Entity	1
Cash and cash equivalents	208,371	211,839
Cash and cash equivalents of Launch Equity		0
Accounts receivable	62,219	64,110
Accounts receivable of Launch Equity		0
Investment securities of Launch Equity	1	1
Other assets	515,747	215,501
Total assets	786,338	491,451
Accounts payable of Launch Equity		0
Securities sold, not yet purchased of Launch Equity		0
Other liabilities	718,459	409,612
Total liabilities	718,459	409,612
Total stockholders' equity	55,616
Noncontrolling interest - Artisan Partners Holdings	12,263	38,060
Noncontrolling interest - Launch Equity		0
Total equity	67,879	81,839
Total liabilities and equity	786,338	491,451
Launch Equity
Cash and cash equivalents		0
Cash and cash equivalents of Launch Equity	30,263	19,156
Accounts receivable		0
Accounts receivable of Launch Equity	0	7,428
Other assets		0
Total assets	90,791	89,948
Accounts payable of Launch Equity	869	7,485
Other liabilities		0
Total liabilities	39,091	39,475
Noncontrolling interest - Artisan Partners Holdings	1	1
Noncontrolling interest - Launch Equity	51,699	50,472
Total equity	51,700	50,473
Total liabilities and equity	$ 90,791	$ 89,948

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Unaudited Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Tax on unrealized gains on investment securities	$ 86	$ 39

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Subsequent Events Details (Details) (Subsequent Event [Member], USD $) In Millions, except Per Share data, unless otherwise specified	0 Months Ended
	Apr. 22, 2014	Apr. 10, 2014
Subsequent Event [Line Items]
Distribution Made to Limited Partner, Cash Distributions Declared	$ 30.6	$ 48.9
Quarterly Cash Dividend [Member] | Class A Common Stock
Subsequent Event [Line Items]
Common Stock, Dividends, Per Share, Declared	$ 0.55
Quarterly Cash Dividend [Member] | Convertible preferred stock
Subsequent Event [Line Items]
Preferred Stock, Dividends Per Share, Declared	$ 0.81

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Computation of basic and diluted net income (loss) per share

The computation of basic and diluted earnings per share for the periods ended March 31, 2014 and 2013 were as follows:

Basic and Diluted Earnings Per Share	For the Three Months Ended March 31, 2014			For the Period from March 12, 2013 to March 31, 2013
Numerator:
Net income (loss) allocable to APAM	$	8,636		$	2,950
Less: Convertible preferred stock deemed dividends	(22,694		)	—
Less: Subsidiary preferred equity deemed dividends	(25,155		)	—
Less: Allocation to participating securities	(6,980		)	(495		)
Net income (loss) allocable to common stockholders	$	(46,193	)	$	2,455
Denominator:
Weighted average shares outstanding - basic	20,214,242			12,728,949
Effect of dilutive securities	—			2,565,463
Weighted average shares outstanding - diluted	20,214,242			15,294,412
Earnings (loss) per share - basic and diluted	$	(2.29	)	$	0.19

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Indemnifications

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Indemnifications

Note 14. Indemnifications

In the normal course of business, APAM enters into agreements that include indemnities in favor of third parties. Holdings has also agreed to indemnify APAM as its general partner, Artisan Investment Corporation (“AIC”) as its former general partner, the directors and officers of APAM, the directors and officers of AIC as its former general partner, the members of its former Advisory Committee, and its partners, directors, officers, employees and agents. Holdings’ subsidiaries may also have similar agreements to indemnify their respective general partner(s), directors, officers, directors and officers of their general partner(s), partners, members, employees, and agents. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against us that have not yet occurred. APAM maintains insurance policies that may provide coverage against certain claims under these indemnities.

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2014

Artisan Funds

Related Party Transaction [Line Items]

Schedule of related party transactions

Fees for managing the Funds and amounts waived or reimbursed by Artisan for fees and expenses (including management fees) are as follows:

	For the Three Months Ended March 31,
	2014		2013
Investment management fees:
Artisan Funds	$	136,586	$	98,080
Fee waiver / expense reimbursement:
Artisan Funds	$	60	$	121

Artisan Global Funds

Related Party Transaction [Line Items]

Schedule of related party transactions

Fees for managing Artisan Global Funds and amounts reimbursed to Artisan Global Funds by Artisan are as follows:

	For the Three Months Ended March 31,
	2014		2013
Investment management fees:
Artisan Global Funds	$	3,239	$	1,439
Fee waiver / expense reimbursement:
Artisan Global Funds	$	82	$	126

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Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent events

Note 16. Subsequent Events

Distributions and dividends

On April 10, 2014, Artisan Partners Holdings paid an aggregate tax distribution of $48.9 million to partnership unit holders, including APAM. On April 22, 2014, the board of directors of APAM declared a distribution by Artisan Partners Holdings of $30.6 million to holders of Artisan Partners Holdings partnership units, including APAM. On the same date, the board declared a quarterly dividend of $0.55 per share of APAM’s Class A common stock and a dividend of $0.81 per share of APAM’s convertible preferred stock. The APAM dividends are payable on May 30, 2014, to shareholders of record as of May 16, 2014.

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Unaudited Consolidated Statements of Changes in Shareholders Equity (USD $) In Thousands	Total	Common Stock	Preferred Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Noncontrolling Interest	Noncontrolling Interest Launch Equity	Redeemable Preferred Units [Member]	IPO [Member]	IPO [Member] Noncontrolling Interest
Redeemable preferred units at Dec. 31, 2012									$ 357,194
Balance at beginning of period at Dec. 31, 2012	(672,715)	0	0	0	0	0	(709,414)	36,699
Net income (loss) before noncontrolling interests	(434,342)						(434,342)
Other Comprehensive Income (Loss), Net of Tax	1,065						1,065
Distributions	(100,514)						(100,514)
Modification of equity and other pre-offering related compensation	572,471						572,471
Modification of redeemable preferred units	357,194						357,194		(357,194)
Initial establishment of contingent value right liability	(55,440)						(55,440)
Capital redemption	(16)						(16)
Redeemable preferred units at Mar. 12, 2013									0
Balance at end of period at Mar. 12, 2013	(332,297)	0	0	0	0	0	(368,996)	36,699
Net income (loss) before noncontrolling interests	34,948				2,950		27,219	4,779
Capital contribution	3,050							3,050
Amortization of equity-based compensation	4,498			1,374			3,124
Deferred Tax Assets Net Of Amounts Payable Under Tax Receivable Agreements	17,989			17,989
Issuance of Class A Common Stock, Net of Issuance Costs										353,414	353,414
Other Comprehensive Income (Loss), Net of Tax	467						0
Capital redemption	(76,319)						(76,319)
Attribution of Noncontrolling Interest	0	674	74,748	(58,365)		3,029	(20,086)
Redeemable preferred units at Mar. 31, 2013									0
Balance at end of period at Mar. 31, 2013	5,750	674	74,748	(39,002)	2,950	3,496	(81,644)	44,528
Balance at beginning of period at Dec. 31, 2013	132,311	703	34,909	6,388	1,401	378	38,060	50,472
Net income (loss) before noncontrolling interests	52,187				8,636		44,149	(598)
Other comprehensive income - foreign currency translation	53					13	40
Other comprehensive income - available for sale investments, net of tax	99					14	85
Cumulative impact of changes in ownership, net of tax	(78)			(3,456)		177	3,201
Capital contribution	1,825							1,825
Amortization of equity-based compensation	28,278			9,357			18,921
Deferred Tax Assets Net Of Amounts Payable Under Tax Receivable Agreements	45,825			45,825
Issuance of Class A Common Stock, Net of Issuance Costs	552,990	93		552,897
Purchase of convertible preferred stock and subsidiary equity	(554,129)	(85)	(21,652)	(533,204)	0		812
Other Comprehensive Income (Loss), Net of Tax	74
Distributions	(93,005)						(93,005)
Dividends	(46,778)			(12,322)	(34,456)
Initial establishment of contingent value right liability	0
Balance at end of period at Mar. 31, 2014	$ 119,578	$ 711	$ 13,257	$ 65,485	$ (24,419)	$ 582	$ 12,263	$ 51,699

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Unaudited Consolidated Statements of Financial Condition (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Class A Common Stock
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares outstanding	29,133,585	19,807,436
Class B Common Stock
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares outstanding	21,566,436	25,271,889
Class C Common Stock
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares outstanding	20,370,787	25,206,554
Convertible preferred stock
Convertible preferred stock, par value per share	$ 0.01	$ 0.01
Convertible preferred stock, shares authorized	15,000,000	15,000,000
Convertible preferred stock, shares outstanding	455,011	1,198,128

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Stockholders' Equity

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Shareholder's equity

Note 9. Stockholders' Equity

APAM - Stockholders’ Equity

As of March 31, 2014 and December 31, 2013, APAM had the following authorized and outstanding equity:

		Outstanding
	Authorized	March 31, 2014	December 31, 2013	Voting Rights (1)	Economic Rights(2)
Common shares
Class A, par value $0.01 per share	500,000,000	29,133,585	19,807,436	1 vote per share	Proportionate
Class B, par value $0.01 per share	200,000,000	21,566,436	25,271,889	5 votes per share	None
Class C, par value $0.01 per share	400,000,000	20,370,787	25,206,554	1 vote per share	None
Preferred shares
Convertible preferred, par value $0.01 per share	15,000,000	455,011	1,198,128	1 vote per share	Proportionate
(1) Each of the Company’s employees to whom Artisan has granted equity have entered into a stockholders agreement with respect to all shares of APAM common stock they have acquired from the Company and any shares they may acquire from the Company in the future, pursuant to which they granted an irrevocable voting proxy to a Stockholders Committee. As of March 31, 2014, Artisan’s employees held 1,616,969 shares of Class A common stock subject to the agreement and all 21,566,436 outstanding shares of Class B common stock.
(2) The holders of preferred units of Holdings are entitled to preferential distributions in the case of a partial capital event or upon dissolution of Holdings. In the case of any distributions on the preferred units, prior to paying any dividends on the Class A common stock, APAM must pay the holders of convertible preferred stock a dividend equal to the distribution APAM received in respect of the preferred units it holds, net of taxes, if any.

APAM is dependent on cash generated by Holdings to fund any dividends. Generally, Holdings will make distributions to all of its partners, including APAM, based on the proportionate ownership each holds in Holdings. APAM will fund dividends to its stockholders from its proportionate share of those distributions after provision for its taxes and other obligations. During the three months ended March 31, 2014, APAM paid a dividend of $2.18 per share of outstanding Class A common stock and $3.00 per share of outstanding convertible preferred stock.

Class A Common Stock

During the three months ended March 31, 2014, APAM issued 9,326,149shares of Class A common stock, in connection with the 2014 Follow-on Offering and restricted share awards granted during the quarter. APAM also granted a total of 6,970 restricted stock units with respect to Class A common stock to non-employee directors.

Each Class A, Class B, Class D and Class E unit of Holdings (together with the corresponding share of Class B or Class C common stock) is exchangeable for one share of Class A common stock. The preferred units of Holdings (together with the corresponding shares of Class C common stock) are also exchangeable for Class A common stock generally on a one-for-one basis, though in certain circumstances on a less than a one-for-one basis. APAM’s convertible preferred stock is convertible into Class A common stock generally on a one-for-one basis, though in certain circumstances on a less than one-for-one basis. During the three months endedMarch 31, 2014, there were no exchanges of units or conversions of convertible preferred stock.

Class B Common Stock

In 2013, APAM issued shares of Class B common stock to employee-partners in amounts equal to the number of Class B common units those individuals held in Holdings. Upon termination of employment with Artisan, an employee-partner’s vested Class B common units are automatically exchanged for Class E common units; unvested Class B common units are forfeited. The employee-partner’s shares of Class B common stock are canceled and APAM issues the former employee-partner a number of shares of Class C common stock equal to the former employee-partner’s number of Class E common units. The former employee-partner’s Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings. As part of the 2014 Follow-on Offering, APAM canceled 3,705,453 shares of Class B common stock corresponding to the Class B common units APAM purchased.

Class C Common Stock

In 2013, APAM issued shares of Class C common stock to certain investors in Holdings in amounts equal to the number of units the investors held in Holdings. As part of the 2014 Follow-on Offering, APAM canceled 4,835,767 shares of Class C common stock corresponding to the Class A, D, and E common units and the preferred units APAM purchased.

Convertible Preferred Stock

APAM issued shares of convertible preferred stock in 2013. When the holders of APAM convertible preferred stock are no longer entitled to preferential distributions, all shares of convertible preferred stock will automatically convert into shares of Class A common stock at the conversion rate plus cash in lieu of fractional shares. As part of the March 2014 Follow-on Offering, APAM purchased 743,117 shares of convertible preferred stock and immediately canceled the shares.

Artisan Partners Holdings - Partners’ Equity

Prior to the IPO Reorganization, Holdings was a private company. Holdings has several outstanding classes of partnership units held by investors.

Holdings makes distributions of its net income to the holders of its partnership units for income taxes as required under the terms of the partnership agreement and also makes additional distributions of its net income under the terms of the partnership agreement. The distributions are recorded in the financial statements on the declaration date, or on the payment date in lieu of a declaration date.

Holdings’ partnership distributions totaled $131.6 million and $166.2 million for the three months ended March 31, 2014 and 2013, respectively. The portion of these distributions made prior to the IPO to the holders of Class B common units (which were classified as liability awards prior to the IPO) are reflected as compensation and benefits expense within the Consolidated Statements of Operations and totaled $65.7 million for the three months ended March 31, 2013. The portion of these distributions made prior to the IPO to the other partners of Holdings and, after the IPO, to all partners are recorded to total stockholders’ equity, with the exception of the portion of distributions made to APAM, the general partner of Holdings. Holdings distributions to APAM totaled $38.6 million for the three months ended March 31, 2014.

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Document and Entity Information Document	3 Months Ended
	Mar. 31, 2014	May 05, 2014 Class A Common Stock	May 05, 2014 Class B Common Stock	May 05, 2014 Class C Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		29,133,585	21,566,436	20,370,787
Entity Registrant Name	Artisan Partners Asset Management Inc.
Entity Central Index Key	0001517302
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Compensation and Benefits

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Compensation and benefits

Note 10. Compensation and Benefits

	For the Three Months Ended March 31,
	2014		2013
Salaries, incentive compensation and benefits (1)	$	81,597	$	72,680
Restricted share compensation expense	4,258		—
Total salaries, incentive compensation and benefits	85,855		72,680
Pre-offering related compensation - share-based awards	23,637		333,231
Pre-offering related compensation - other	—		143,035
Total compensation and benefits	$	109,492	$	548,946
(1) Excluding restricted share compensation expense

Incentive compensation

Cash incentive compensation paid to members of Artisan’s portfolio management teams and members of its marketing and client service teams is based on a formula that is tied directly to revenues. These payments are made in the quarter following the quarter in which the incentive was earned with the exception of fourth quarter payments which are paid in the fourth quarter of the year. Cash incentive compensation paid to most other employees is discretionary and subjectively determined based on individual performance and Artisan’s overall results during the applicable year and has historically been paid in the fourth quarter of the year.

Restricted shares

Pursuant to the 2013 Omnibus Incentive Compensation Plan, Artisan has issued restricted shares of Class A common stock to its employees and employees of its subsidiaries. The shares vest on a pro rata basis over five years. Unvested shares are subject to forfeiture upon termination of employment. Grantees receiving the awards are entitled to dividends on unvested and vested shares.

Compensation expense related to the restricted shares is recognized based on the estimated grant date fair value, for only those awards expected to vest, on a straight-line basis over the requisite service period of the award. The Company estimated the number of awards expected to vest based, in part, on historical forfeiture rates and also based on management’s expectations of employee turnover. Forfeitures are estimated at the time of grant and revised in subsequent periods, if necessary, based on actual forfeiture activity.

The following table summarizes the restricted share activity for the three months ended March 31, 2014:

	Weighted-Average Grant Date Fair Value		Number of Awards
Unvested at December 31, 2013	$	52.36	1,575,157
Granted	$	71.59	41,812
Forfeited	—		—
Vested	—		—
Unvested at March 31, 2014	$	52.85	1,616,969

Compensation expense recognized related to the restricted shares was $4.3 million for the three months ended March 31, 2014. The unrecognized compensation expense for the unvested restricted shares as of March 31, 2014 was $70.5 million with a weighted average recognition period of 4.4 years remaining.

Pre-offering related compensation consists of the following:

	For the Three Months Ended March 31,
	2014		2013
Change in value of Class B liability awards	$	—	$	41,942
Class B award modification expense	—		287,292
Amortization expense on pre-offering Class B awards	23,637		3,997
Pre-offering related compensation - share-based awards	23,637		333,231
Pre-offering related cash incentive compensation	—		56,788
Pre-offering related bonus make-whole compensation	—		20,520
Distributions on Class B liability awards	—		65,727
Pre-offering related compensation - other	—		143,035
Total pre-offering related compensation	$	23,637	$	476,266

Pre-offering related compensation - share-based awards

Historical Class B share-based awards

Holdings historically granted Class B share-based awards to certain employees. These awards vested over a period of five years. Prior to the IPO, all vested Class B awards were subject to mandatory redemption on termination of employment for any reason and were reflected as liabilities measured at fair value; unvested Class B awards were forfeited on termination of employment. The vested Class B liability awards of a terminated employee were historically redeemed in cash in annual installments, generally over the five years following termination of employment. The change in value of Class B liability awards and distributions to Class B limited partners were treated as compensation expense.

Historical redemption of Class B awards

Holdings historically redeemed the Class B awards of partners whose employment was terminated. The redemption value of the awards was determined in accordance with the terms of the grant agreement pursuant to which the award was granted. The Class B awards of partners whose services to Holdings terminated prior to the IPO will be redeemed for payments totaling $19.6 million and $23.0 million as of March 31, 2014 and December 31, 2013, respectively. Payments of $3.4 million were made for the three months ended March 31, 2014.

Modification of Class B share-based awards

As a part of the IPO Reorganization, the Class B grant agreements were amended to eliminate the cash redemption feature. The amendment is considered a modification under ASC 718 and the Class B awards have been classified as equity awards since such modification. As a result of the modification, Artisan recognized a non-recurring expense of $287.3 million based on the elimination of the redemption feature associated with the Class B awards recorded as the difference between the fair value and carrying value of the liability associated with the vested Class B common units immediately prior to the IPO. For any unvested Class B awards, Artisan will recognize recurring non-cash compensation charges over the remaining vesting period.

The following table summarizes the activity related to unvested Class B awards for the three months ended March 31, 2014:

	Weighted-Average Grant Date Fair Value		Number of Class B Awards
Unvested Class B awards at January 1, 2014	$	30.00	7,249,842
Granted	—		—
Forfeited	—		—
Vested	$	30.00	(666,878	)
Unvested at March 31, 2014	$	30.00	6,582,964

The unrecognized compensation expense for the unvested Class B awards as of March 31, 2014 was $128.2 million with a weighted average recognition period of 2.8 years remaining.

Upon termination of employment with Artisan, an employee-partner’s vested Class B common units are automatically exchanged for Class E common units; unvested Class B common units are forfeited. The employee-partner’s shares of Class B common stock are canceled and APAM issues the former employee-partner a number of shares of Class C common stock equal to the former employee-partner’s number of Class E common units. The former employee-partner’s Class E common units are exchangeable for Class A common stock subject to the same restrictions and limitations on exchange applicable to the other common units of Holdings.

Pre-offering related compensation - other

During the three months ended March 31, 2013, Artisan also incurred pre-offering related compensation charges of $56.8 million to pay cash incentive compensation to certain portfolio managers and $20.5 million representing profits after the IPO otherwise allocable and distributable, in the aggregate, to Holdings’ pre-IPO non-employee partners that instead was allocated and distributed to certain employee-partners. For the period between January 1, 2013 and the IPO, profits distributions totaling $65.7 million were made to Class B partners.

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Unaudited Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Revenues
Management Fees		$ 201,792	$ 148,214
Performance fees		0	9
Total revenues		201,792	148,223
Compensation and benefits
Salaries, incentive compensation and benefits		85,855	72,680
Pre-offering related compensation - share-based awards		23,637	333,231
Pre-offering related compensation - other		0	143,035
Total compensation and benefits		109,492	548,946
Distribution and marketing		11,174	8,176
Occupancy		2,686	2,616
Communication and technology		4,476	3,330
General and administrative		6,812	6,469
Total operating expenses		134,640	569,537
Total operating income (loss)		67,152	(421,314)
Non-operating income (loss)
Interest expense		(2,883)	(3,210)
Net gain (loss) of Launch Equity		(598)	4,779
Net gain on the valuation of contingent value rights		0	24,800
Other non-operating expense		(276)	0
Total non-operating income (loss)		(3,757)	26,369
Income (loss) before income taxes		63,395	(394,945)
Provision for income taxes		11,208	4,449
Net income (loss) before noncontrolling interests	34,948	52,187	(399,394)
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings		44,149	(407,123)
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity		(598)	4,779
Net income attributable to Artisan Partners Asset Management Inc.	$ 2,950	$ 8,636	$ 2,950
Earnings (loss) per share
Basic	$ 0.19	$ (2.29)
Diluted	$ 0.19	$ (2.29)
Weighted average number of common shares outstanding
Basic	12,728,949	20,214,242
Diluted	15,294,412	20,214,242
Dividends declared per Class A common share	$ 0.00	$ 2.18

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Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 4. Fair Value Measurements

The table below presents information about Artisan’s assets and liabilities that are measured at fair value and the valuation techniques Artisan utilized to determine such fair value. The fair value of financial instruments held by Launch Equity is presented in Note 8, “Variable and Voting Interest Entities”. In accordance with ASC 820, fair value is defined as the price that Artisan would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. The following three-tier fair value hierarchy prioritizes the inputs used in measuring fair value:

• Level 1 – Observable inputs such as quoted (unadjusted) market prices in active markets for identical securities.

• Level 2 – Other significant observable inputs (including but not limited to quoted prices for similar instruments, interest rates, prepayment speeds, credit risk, etc.).

• Level 3—Significant unobservable inputs (including Artisan’s own assumptions in determining fair value).

The following provides the hierarchy of inputs used to derive fair value of Artisan’s assets and liabilities that are financial instruments as of March 31, 2014 and December 31, 2013:

	Assets and Liabilities at Fair Value
	Total		Level 1		Level 2		Level 3
March 31, 2014
Assets
Cash equivalents	$	60,002	$	60,002	$	—	$	—
Mutual funds	17,911		17,911		—		—
December 31, 2013
Assets
Cash equivalents	$	105,001	$	105,001	$	—	$	—
Equity mutual funds	7,804		7,804		—		—

Fair values determined based on Level 1 inputs utilize quoted market prices for identical assets. Level 1 assets generally consist of money market accounts, marketable open-end mutual funds or UCITS. There were no Level 2 or Level 3 assets or liabilities recorded at fair value as of March 31, 2014 and December 31, 2013.

Artisan’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no transfers between Level 1, Level 2 or Level 3 securities during the three months ended March 31, 2014 and 2013.

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Investment Securities

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investment securities

Note 3. Investment Securities

The disclosures below include details of Artisan’s investments. Investments held by Launch Equity are described in Note 8, “Variable and Voting Interest Entities”.

	Cost		Unrealized Gains		Unrealized Losses		Fair Value
At March 31, 2014
Mutual funds	$	16,190	$	1,721	$	—	$	17,911
At December 31, 2013
Mutual funds	$	6,190	$	1,614	$	—	$	7,804

Artisan’s investments in mutual funds consist of investments in shares of Artisan Partners Funds, Inc. and Artisan Partners Global Funds plc and are considered to be available-for-sale securities. As a result, unrealized gains (losses) are recorded to other comprehensive income (loss). During the three months ended March 31, 2014, Artisan made an investment of $10.0 million in Artisan Partners High Income Fund.

As of March 31, 2014 and December 31, 2013, Artisan held no available-for-sale securities in an unrealized loss position.

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Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Related party transactions

Note 15. Related Party Transactions

Artisan engages in transactions with its affiliates in the ordinary course of business.

Affiliate transactions—Artisan Funds

Artisan has agreements to serve as the investment manager of Artisan Funds, with which certain of Artisan employees are affiliated. Under the terms of these agreements, which are generally reviewed and continued by the board of directors of Artisan Funds annually, a fee is paid to Artisan based on an annual percentage of the average daily net assets of each Artisan Fund ranging from 0.63% to 1.25%. Artisan generally collects revenues related to these services on the last business day of each month and records them in Management fees in the Consolidated Statement of Operations. Artisan has contractually agreed to waive its management fees or reimburse for expenses incurred to the extent necessary to limit annualized ordinary operating expenses incurred by certain of the Artisan Funds to not more than 1.50% of average daily net assets, and 1.25% of the fund’s average daily net assets for the Artisan Partners High Income Fund. In addition, Artisan may voluntarily waive fees or reimburse any of the Artisan Funds for other expenses. The officers and a director of Artisan Funds who are affiliated with Artisan receive no compensation from the funds. At March 31, 2014 and December 31, 2013, accounts receivable included $3 thousand and $9 thousand due from the Funds, respectively.

Fees for managing the Funds and amounts waived or reimbursed by Artisan for fees and expenses (including management fees) are as follows:

	For the Three Months Ended March 31,
	2014		2013
Investment management fees:
Artisan Funds	$	136,586	$	98,080
Fee waiver / expense reimbursement:
Artisan Funds	$	60	$	121

Affiliate transactions—Artisan Global Funds

Artisan has agreements to serve as the investment manager and promoter of Artisan Global Funds, with which certain of Artisan employees are affiliated. Under the terms of these agreements, a fee is paid based on an annual percentage of the average daily net assets of each fund ranging from 0.75% to 1.80%. Artisan reimburses each sub-fund of Artisan Global Funds to the extent that sub-fund’s expenses, not including Artisan’s fee, exceed certain levels, which range from 0.10% to 0.20%. At March 31, 2014 and December 31, 2013, respectively, accounts receivable included $1.2 million and $2.2 million due from Artisan Global Funds.

Fees for managing Artisan Global Funds and amounts reimbursed to Artisan Global Funds by Artisan are as follows:

	For the Three Months Ended March 31,
	2014		2013
Investment management fees:
Artisan Global Funds	$	3,239	$	1,439
Fee waiver / expense reimbursement:
Artisan Global Funds	$	82	$	126

Affiliate transactions—Launch Equity

Artisan has an agreement to serve as the investment manager of Launch Equity. Under the terms of Artisan’s agreement with Launch Equity, Artisan earns a quarterly fee based on the value of the closing capital account of each limited partner for the quarter, at the rate of 1.00% (annualized). At Artisan’s discretion, the fee may be waived and certain expenses reimbursed to the extent they exceed a certain level. Artisan expects to waive 100% of the quarterly fee and reimburse Launch Equity for all operating expenses, and Artisan may waive other expenses as well. Artisan is also entitled to receive an allocation of profits equal to 20% of Launch Equity’s net capital appreciation as determined at the conclusion of its fiscal year. That amount, which Artisan also expects to waive, is calculated at the end of the Launch Equity’s fiscal year. Artisan waived its incentive allocation for the year ended December 31, 2013. Expense reimbursements totaled $38 thousand and $40 thousand for the three months ended March 31, 2014 and 2013, respectively.

Affiliate transactions—AIC

Artisan had and has cost sharing arrangements with entities controlled by Andrew A. Ziegler (APAM’s Chairman of the Board and former Artisan employee) and Carlene M. Ziegler (also a former Artisan employee), pursuant to which the Ziegler entities currently reimburse Artisan for the costs associated with three employees using Artisan’s office space while they transition to new facilities, which is expected to occur by the end of June 2014. In addition, Artisan has obtained and paid for insurance policies covering potential liability AIC may incur as the prior general partner of Holdings. At March 31, 2014 and December 31, 2013, accounts receivable included $139 thousand and $243 thousand due from Ziegler entities, respectively.

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Income Taxes and Related Payments

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income taxes and related payments

Note 11. Income Taxes and Related Payments

APAM is subject to U.S. federal and state income taxation on APAM’s allocable portion of the income of Holdings. APAM’s effective income tax rate was lower than the U.S. Federal statutory rate of 35% primarily due to a rate benefit attributable to the fact that approximately 62% of Holdings’ earnings are not subject to corporate level taxes. This favorable impact is partially offset by the impact of certain permanent items, primarily attributable to certain compensation related expenses that are not deductible for tax purposes. Prior to the IPO Reorganization, none of Holdings’ earnings were subject to U.S. corporate-level taxes.

In connection with the IPO, APAM entered into two tax receivable agreements (“TRAs”). Under the first TRA, APAM generally is required to pay to a private equity fund controlled by Hellman & Friedman LLC 85% of the applicable cash savings, if any, in U.S. federal and state income tax that APAM actually realizes (or is deemed to realize in certain circumstances) as a result of (i) the tax attributes of the preferred units APAM acquired in the merger of a wholly-owned subsidiary of the private equity fund into APAM in March 2013 (the “H&F Corp Merger”), (ii) net operating losses available as a result of the merger and (iii) tax benefits related to imputed interest.

Under the second TRA, APAM generally is required to pay to the holders of limited partnership units of Holdings 85% of the applicable cash savings, if any, in U.S. federal and state income tax that APAM actually realizes (or is deemed to realize in certain circumstances) as a result of (i) certain tax attributes of their units sold to APAM or exchanged (for shares of Class A common stock or convertible preferred stock) and that are created as a result of the sales or exchanges and payments under the TRAs and (ii) tax benefits related to imputed interest. Under both agreements, APAM generally will retain the benefit of the remaining 15% of the applicable tax savings.

For purposes of the TRAs, cash savings in tax are calculated by comparing APAM’s actual income tax liability to the amount it would have been required to pay had it not been able to utilize any of the tax benefits subject to the TRAs, unless certain assumptions apply. The TRAs will continue in effect until all such tax benefits have been utilized or expired, unless APAM exercises its right to terminate the agreements or payments under the agreements are accelerated in the event that APAM materially breaches any of its material obligations under the agreements. The actual increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of exchanges by the holders of limited partnership units, the price of the Class A common stock or the value of the convertible preferred stock, as the case may be, at the time of the exchange, whether such exchanges are taxable, the amount and timing of the taxable income APAM generates in the future and the tax rate then applicable and the portion of APAM’s payments under the TRAs constituting imputed interest.

Payments under the TRAs, if any, will be made pro rata among all TRA counterparties entitled to payments on an annual basis to the extent APAM has sufficient taxable income to utilize the increased depreciation and amortization charges. Artisan expects to make payments under the TRAs, to the extent they are required, within 125 days after APAM’s federal income tax return is filed for each fiscal year. Interest on such payments will begin to accrue at a rate equal to one-year LIBOR plus 100 basis points from the due date (without extension) of such tax return.

The 2014 Follow-on Offering resulted in an increase to deferred tax assets and amounts payable under the TRA of $287.4 million and $244.3 million, respectively. As of March 31, 2014, the deferred tax asset and amounts payable related to the TRA were $468.4 million and $405.2 million. respectively. No amounts were paid under the TRAs during the three months ended March 31, 2014.

Components of the provision for income taxes consist of the following:

	For the Three Months Ended March 31,
	2014			2013
Current:
Federal	$	7,610		$	1,177
State and local	981			544
Foreign	77			82
Total	8,668			1,803
Deferred:
Federal	2,776			2,588
State and local	(236		)	58
Total	2,540			2,646
Income tax expense	$	11,208		$	4,449

Net deferred tax assets comprise the following:

	As of March 31, 2014		As of December 31, 2013
Deferred tax assets:
Amortizable basis (1)	$	468,440	$	183,858
Other (2)	6,349		4,049
Total deferred tax assets	474,789		187,907
Less: valuation allowance (3)	—		—
Net deferred tax assets	$	474,789	$	187,907
(1) Represents the unamortized step-up of tax basis from the H&F Corp Merger and the purchase of common and preferred units by APAM.
(2) Represents the net deferred tax assets associated with the H&F Corp Merger and other miscellaneous deferred tax assets.
(3) Artisan assessed whether the deferred tax assets would be realizable and determined based on its history of taxable income that the benefits would more likely than not be realized. Accordingly, no valuation allowance is required.

Accounting standards establish a minimum threshold for recognizing, and a system for measuring, the benefits of income tax return positions in financial statements. There were no uncertain tax positions recorded as of March 31, 2014 and December 31, 2013.

In the normal course of business, Artisan is subject to examination by federal and certain state, local and foreign tax regulators. As of March 31, 2014, U.S. federal income tax returns for the years 2010 through 2013 are open and therefore subject to examination. State and local tax returns are generally subject to audit from 2009 to 2013. Foreign tax returns are generally subject to audit from 2010 to 2013.

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Noncontrolling Interest - Holdings

3 Months Ended

Mar. 31, 2014

Noncontrolling Interest [Abstract]

Noncontrolling interest - Artisan Partners Holdings

Note 7. Noncontrolling interest - Holdings

Holdings is the predecessor of APAM for accounting purposes, and its consolidated financial statements are Artisan’s historical financial statements for periods prior to March 12, 2013, the date on which APAM became the general partner of Holdings.

As of March 31, 2014, APAM held approximately 41% of the economic interests in Holdings. Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings in the Unaudited Consolidated Statements of Operations represents the portion of earnings or loss attributable to the economic interests in Holdings held by the limited partners of Holdings. All income for the period prior to March 12, 2013, is entirely attributable to noncontrolling interests.

During the three months ended March 31, 2014, APAM’s ownership interest in Holdings increased due to (i) the issuance of 41,812 Holdings’ GP units corresponding to 41,812 restricted shares of Class A common stock issued by APAM during the period, (ii) the issuance of 9,284,337 Holdings’ GP units corresponding to the 9,284,337 shares of Class A common stock issued during the period and (iii) APAM’s purchase and cancellation of 6,284,337 common units and 3,000,000 preferred units of Holdings. Since APAM continues to have a controlling interest in Holdings, changes in ownership of Holdings are accounted for as equity transactions. Additional paid-in capital and Noncontrolling interest - Artisan Partners Holdings in the Unaudited Condensed Consolidated Statements of Financial Condition are adjusted to reallocate Holdings’ historical equity to reflect the change in APAM’s ownership of Holdings.

As a result of the change in ownership, a deficit of $3.5 million was transferred to Additional paid-in capital from Noncontrolling interests - Artisan Partners Holdings. Additionally, Accumulated other comprehensive income was adjusted to reflect the change in ownership interest through a $0.3 million reduction to Noncontrolling interest and a $0.2 million increase to accumulated other comprehensive income, net of tax. The increased ownership level also resulted in a $2.1 million increase in deferred tax assets and Additional paid-in-capital. The impact of the change in APAM’s ownership interests in Holdings is reflected in the Unaudited Consolidated Statement of Changes in Stockholders’ Equity.

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Borrowings

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Borrowings

Note 5. Borrowings

Artisan’s borrowings consist of the following as of March 31, 2014 and December 31, 2013:

	Maturity	Outstanding Balance		Interest Rate Per Annum
Revolving credit agreement	August 2017	—		NA
Senior notes
Series A	August 2017	60,000		4.98	%
Series B	August 2019	50,000		5.32	%
Series C	August 2022	90,000		5.82	%
Total borrowings		$	200,000

The fair value of borrowings was approximately $201.6 millionas of March 31, 2014. Fair value was determined based on future cash flows, discounted to present value using current market interest rates. The inputs are categorized as Level 2 in the fair value hierarchy, as defined in Note 4, “Fair Value Measurements”.

Interest expense incurred on the unsecured notes and revolving credit agreement was $2.8 million and $3.1 million for the three months ended March 31, 2014 and 2013, respectively.

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Derivative Instruments

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 6. Derivative Instruments

Contingent Value Rights (“CVRs”)

As part of the IPO Reorganization, Holdings issued Partnership CVRs and APAM issued APAM CVRs to the holders of Holdings’ preferred units and APAM’s convertible preferred stock, respectively. APAM held one Partnership CVR for each APAM CVR outstanding. On November 6, 2013, the CVRs were terminated with no amounts paid or payable by Artisan.

The CVRs were considered derivative instruments under ASC 815, Derivatives and Hedging, and accordingly were recorded as a liability at fair value on the balance sheet until they were terminated. Changes in the fair value of these derivative instruments have been recorded in earnings as a net gain (loss) on the valuation of contingent value rights in the period of change. The following table presents gains (losses) recognized on derivative instruments for the three months ended March 31, 2014 and 2013:

		Three months ended March 31,
		2014				2013
	Income Statement Classification	Gains		Losses		Gains		Losses
Contingent value rights	Net gain on the valuation of contingent value rights	$	—	$	—	$	24,800	$	—
Total		$	—	$	—	$	24,800	$	—

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Variable and Voting Interest Entities

3 Months Ended

Mar. 31, 2014

Variable Interest Entities Disclosure [Abstract]

Variable and voting interest entities

Note 8. Variable and Voting Interest Entities

Artisan Funds and Artisan Global Funds

Artisan serves as the investment adviser for Artisan Partners Funds, Inc. (“Artisan Funds”), a family of mutual funds registered with the SEC under the Investment Company Act of 1940, and Artisan Partners Global Funds plc (“Artisan Global Funds”), a family of Ireland-based UCITS. Artisan Funds and Artisan Global Funds are corporate entities the business and affairs of which are managed by their respective boards of directors. The shareholders of the funds retain all voting rights, including the right to elect and reelect members of their respective boards of directors. As a result, each of these entities is a voting interest entity (“VOE”). While Artisan holds, in limited cases, direct investments in a fund (which are made on the same terms as are available to other investors and do not represent a majority voting interest in any fund), Artisan does not have a controlling financial interest or a majority voting interest and, as such, does not consolidate these entities.

Artisan Partners Launch Equity LP

Artisan serves as the investment adviser for Launch Equity, a private investment partnership which seeks to achieve returns primarily through capital appreciation, while also mitigating market risk through the use of hedging strategies. Artisan receives management fees as compensation for services provided as the investment adviser. Artisan also maintains, through Artisan Partners Alternative Investments GP LLC, a direct equity investment in the fund and receives an allocation of profits based upon Launch Equity’s net capital appreciation during a fiscal year. Each of these represents a variable interest in the fund.

The limited partners of Launch Equity are certain current or former Artisan employees and are considered related parties. Artisan has determined that Launch Equity is a VIE as (a) the voting rights of the limited partners are not proportional to their obligations to absorb expected losses and rights to receive expected residual returns and (b) substantially all of Launch Equity’s activities either involve or are conducted on behalf of the limited partners (the investors that have disproportionately few voting rights) and their related parties (including Artisan).

Launch Equity qualifies for deferral of the current consolidation guidance for VIEs; therefore the consolidation assessment is based on previous consolidation guidance. This guidance requires an analysis of which party, through holding interests directly or indirectly in the entity or contractually through other variable interests, such as management fees and incentive allocations, would absorb a majority of the expected variability of the entity. In determining whether Artisan is the primary beneficiary of Launch Equity, both qualitative and quantitative factors such as voting rights of the equity holders, economic participation of all parties, including how fees are earned, related party ownership and the level of involvement Artisan had in the design of the VIE, were considered. It was concluded that Artisan was the primary beneficiary as the related party group absorbs a majority of the variability associated with Launch Equity and Artisan is the member within the related party group that is most closely associated with the VIE. Although Artisan has only a minimal equity investment in Launch Equity, as the general partner, controls Launch Equity’s management and affairs.

In addition, the fund was designed to attract third party investors to provide an economic benefit to Artisan in the form of quarterly management fees and an annual incentive allocation based upon the net capital appreciation of the fund. Also, in the ordinary course of business, Artisan may choose to waive certain fees, its incentive allocation or assume operating expenses of the fund. As a result, it was concluded that Artisan is the primary beneficiary of Launch Equity and its results are included in Artisan’s consolidated financial statements.

Artisan’s maximum exposure to loss from its involvement with Launch Equity is limited to its equity investment of $1 thousand while the potential benefit is limited to the management and incentive fees received as investment adviser. Therefore, the gains or losses of Launch Equity have not had a significant impact on Artisan’s results of operations, liquidity or capital resources. Artisan has no right to the benefits from, nor does it bear the risks associated with, Launch Equity’s investments, beyond Artisan’s minimal direct investment in Launch Equity. If Artisan were to liquidate, the assets of Launch Equity would not be available to its general creditors and as a result, Artisan does not consider investments held by Launch Equity to be Artisan’s assets.

The following tables reflect the impact of consolidating Launch Equity’s assets and liabilities into the Consolidated Statement of Financial Condition as of March 31, 2014 and December 31, 2013 and results into the Consolidated Statement of Operations for the three months ended March 31, 2014 and 2013.

Condensed Consolidating Statements of Financial Condition
	As of March 31, 2014									As of December 31, 2013
	Before Consolidation		Launch Equity		Eliminations			As Reported		Before Consolidation		Launch Equity		Eliminations			As Reported
Cash and cash equivalents	$	208,371	$	—	$	—		$	208,371	$	211,839	$	—	$	—		$	211,839
Cash and cash equivalents of Launch Equity	—		30,263		—			30,263		—		19,156		—			19,156
Accounts receivable	62,219		—		—			62,219		64,110		—		—			64,110
Accounts receivable of Launch Equity	—		—		—			—		—		7,428		—			7,428
Investment securities of Launch Equity	1		60,528		(1		)	60,528		1		63,364		(1		)	63,364
Other assets	515,747		—		—			515,747		215,501		—		—			215,501
Total assets	$	786,338	$	90,791	$	(1	)	$	877,128	$	491,451	$	89,948	$	(1	)	$	581,398
Accounts payable of Launch Equity	$	—	$	869	$	—		$	869	$	—	$	7,485	$	—		$	7,485
Securities sold, not yet purchased of Launch Equity	—		38,222		—			38,222		—		31,990		—			31,990
Other liabilities	718,459		—		—			718,459		409,612		—		—			409,612
Total liabilities	718,459		39,091		—			757,550		409,612		39,475		—			449,087
Total stockholders’ equity	55,616		—		—			55,616		43,779		—		—			43,779
Noncontrolling interest - Artisan Partners Holdings	12,263		1		(1		)	12,263		38,060		1		(1		)	38,060
Noncontrolling interest - Launch Equity	—		51,699		—			51,699		—		50,472		—			50,472
Total equity	67,879		51,700		(1		)	119,578		81,839		50,473		(1		)	132,311
Total liabilities and equity	$	786,338	$	90,791	$	(1	)	$	877,128	$	491,451	$	89,948	$	(1	)	$	581,398

Condensed Consolidating Statements of Operations
	Three Months Ended
	March 31, 2014												March 31, 2013
	Before Consolidation			Launch Equity			Eliminations			As Reported			Before Consolidation			Launch Equity		Eliminations			As Reported
Total revenues	$	201,917		$	—		$	(125	)	$	201,792		$	148,327		$	—	$	(104	)	$	148,223
Total operating expenses	134,765			—			(125		)	134,640			569,641			—		(104		)	569,537
Operating income (loss)	67,152			—			—			67,152			(421,314		)	—		—			(421,314		)
Non-operating income (loss)	(3,159		)	—			—			(3,159		)	21,590			—		—			21,590
Net gain (loss) of Launch Equity	—			(598		)	—			(598		)	—			4,779		—			4,779
Total non-operating income (loss)	(3,159		)	(598		)	—			(3,757		)	21,590			4,779		—			26,369
Income (loss) before income taxes	63,993			(598		)	—			63,395			(399,724		)	4,779		—			(394,945		)
Provision for income taxes	11,208			—			—			11,208			4,449			—		—			4,449
Net income (loss)	52,785			(598		)	—			52,187			(404,173		)	4,779		—			(399,394		)
Less: Net income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44,149			—			—			44,149			(407,123		)	—		—			(407,123		)
Less: Net income (loss) attributable to noncontrolling interests - Launch Equity	—			(598		)	—			(598		)	—			4,779		—			4,779
Net income attributable to Artisan Partners Asset Management Inc.	$	8,636		$	—		$	—		$	8,636		$	2,950		$	—	$	—		$	2,950

The carrying value of Launch Equity’s consolidated investments is also their fair value. Short and long positions on investment securities are valued based upon closing market prices of the security on the principal exchange on which they are traded. Investments in investment companies are valued at their respective net asset values on the valuation date. Short-term investments, other than repurchase agreements, maturing within sixty days from the valuation date are valued at amortized cost, which approximates market value. The following table presents the fair value hierarchy levels of investments and liabilities held by Launch Equity which are measured at fair value as of March 31, 2014 and December 31, 2013:

	Assets and Liabilities at Fair Value:
	Total		Level 1		Level 2		Level 3
March 31, 2014
Assets
Investment securities – long position	$	60,528	$	60,528	$	—	$	—
Liabilities
Investment securities – short position	$	38,222	$	38,222	$	—	$	—
December 31, 2013
Assets
Investment securities – long position	$	63,364	$	63,364	$	—	$	—
Liabilities
Investment securities – short position	$	31,990	$	31,990	$	—	$	—

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated other comprehensive income (loss), net of tax, in the accompanying Condensed Consolidated Statements of Financial Condition represents the portion of accumulated other comprehensive income attributable to APAM, and consists of the

following:

	As of March 31, 2014		As of December 31, 2013
Unrealized gain on investments	$	455	$	303
Foreign currency translation	127		75
Accumulated Other Comprehensive Income (Loss)	$	582	$	378

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Compensation and Benefits - Additional information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
StockBasedAwardPayment	$ 3,459
Stock Based Awards Redemption Amount	19,566		23,026
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost	0	287,292
Other Labor-related Expenses	0	143,035
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	70,500
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	4 years 4 months 7 days
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Class B Liability Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 128,239
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 9 months 8 days
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Redemption period for terminated employees	5 years

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Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 13. Earnings Per Share

Basic earnings per share is computed by dividing income available to Class A common stockholders by the weighted average number of Class A common shares outstanding during the period. Unvested restricted shares are excluded from the number of Class A common shares outstanding for the basic earnings per share calculation because the shares have not yet been earned by the employees. Income available to Class A common stockholders is computed by reducing net income attributable to APAM by dividends declared or paid to convertible preferred stockholders during the period and earnings (distributed and undistributed) allocated to participating securities, according to their respective rights to participate in those earnings. All income for the period prior to the IPO was entirely allocable to noncontrolling interest. As a result, only net income allocable to APAM from the period subsequent to the IPO is included in net income (loss) available to Class A common stockholders for the period ended March 31, 2013.

As described in Note 1, “Organization and nature of business” the consideration Artisan paid to purchase shares of its convertible preferred stock in connection with the 2014 Follow-on Offering exceeded the carrying amount of the shares of convertible preferred stock on Artisan’s consolidated balance sheet by $22.7 million, which is subtracted from net income as a deemed dividend to arrive at income available to common stockholders in the earnings per share calculation. The purchase of subsidiary preferred equity in connection with the 2014 Follow-on Offering resulted in a similar deemed dividend, which reduced net income available to common stockholders by an additional $25.2 million in the calculation of earnings per share.

Diluted earnings per share is computed by increasing the denominator by the amount of additional Class A common shares that would have been outstanding if all potential Class A common shares had been issued. Potential dilutive Class A common shares consist of (1) the Class A common shares issuable upon exchange of Holdings’ limited partnership units (together with the corresponding shares of APAM Class B or C common stock) for APAM Class A common stock, (2) the Class A common shares issuable upon conversion of APAM convertible preferred stock into APAM Class A common stock and (3) unvested restricted shares of Class A common stock.

At March 31, 2014 and 2013, there were 41,937,223 and 54,713,763, respectively, limited partnership units of Holdings outstanding exchangeable, as of March 12, 2014, for up to 41,937,223 and 54,713,763 shares, respectively, of APAM’s Class A common stock. Such units/shares were not included in the calculation of diluted net income (loss) per common share because the effect would have been anti-dilutive. For the three months ended March 31, 2014, a net loss was allocable to common stockholders. As a result, 1,616,969 shares of unvested restricted stock and 455,011 shares of convertible preferred stock and the net income allocated to those shares were excluded from the diluted earnings per share calculation because their effect would have been anti-dilutive.

At March 31, 2013, 2,565,463 shares of APAM convertible preferred stock were determined to be dilutive and are included in the diluted earnings per share calculation. The dilutive effect of outstanding convertible preferred stock is reflected in diluted earnings per share by application of the if-converted method.

The computation of weighted average common shares outstanding considers the outstanding shares of Class A common stock from January 1, 2014 through March 31, 2014 and March 12, 2013 through March 31, 2013, for the respective periods. The Class B and Class C common shares do not share in profits of APAM and therefore are not reflected.

The computation of basic and diluted earnings per share for the periods ended March 31, 2014 and 2013 were as follows:

Basic and Diluted Earnings Per Share	For the Three Months Ended March 31, 2014			For the Period from March 12, 2013 to March 31, 2013
Numerator:
Net income (loss) allocable to APAM	$	8,636		$	2,950
Less: Convertible preferred stock deemed dividends	(22,694		)	—
Less: Subsidiary preferred equity deemed dividends	(25,155		)	—
Less: Allocation to participating securities	(6,980		)	(495		)
Net income (loss) allocable to common stockholders	$	(46,193	)	$	2,455
Denominator:
Weighted average shares outstanding - basic	20,214,242			12,728,949
Effect of dilutive securities	—			2,565,463
Weighted average shares outstanding - diluted	20,214,242			15,294,412
Earnings (loss) per share - basic and diluted	$	(2.29	)	$	0.19

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule of available-for-sale securities

The disclosures below include details of Artisan’s investments. Investments held by Launch Equity are described in Note 8, “Variable and Voting Interest Entities”.

	Cost		Unrealized Gains		Unrealized Losses		Fair Value
At March 31, 2014
Mutual funds	$	16,190	$	1,721	$	—	$	17,911
At December 31, 2013
Mutual funds	$	6,190	$	1,614	$	—	$	7,804

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Compensation and Benefits - Components of expense (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Salaries, incentive compensation and benefits	$ 81,597	$ 72,680
Restricted share compensation expense	28,278	576,969
Total salaries, incentive compensation and benefits	85,855	72,680
Change in value of Class B liability awards	0	41,942
Class B award modification expense	0	287,292
Amortization expense on pre-offering Class B awards	23,637	3,997
Pre-offering related compensation - share-based awards	23,637	333,231
Pre-offering related compensation - other	0	143,035
Distributions on Class B liability awards	131,629	166,241
Total pre-offering related compensation	23,637	476,266
Total compensation and benefits	109,492	548,946
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted share compensation expense	4,258	0
Pre-offering related cash incentive compensation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pre-offering related compensation - other	0	56,788
Pre-offering related bonus make-whole compensation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pre-offering related compensation - other	0	20,520
Distributions on liability awards | Distributions on Class B liability awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pre-offering related compensation - other		65,727
Distributions on Class B liability awards	$ 0	$ 65,727

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Borrowings - Aggregate Maturities of Debt Obligations (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Debt Disclosure [Abstract]
2014	$ 0
2015	0
2016	0
2017	60,000
Thereafter	140,000
Borrowings	$ 200,000	$ 200,000

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Unaudited Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net income (loss) before noncontrolling interests	$ 52,187	$ (399,394)
Unrealized gains on investment securities:
Unrealized holding gains on investment securities, net of tax of $86 and $39, respectively	21	1,854
Less: reclassification adjustment for gains (losses) included in net income	0	0
Net unrealized gains on investment securities	21	1,854
Foreign currency translation gain (loss)	53	(322)
Total other comprehensive income	74	1,532
Comprehensive income (loss)	52,261	(397,862)
Comprehensive income (loss) attributable to noncontrolling interests - Artisan Partners Holdings	44,019	(405,662)
Comprehensive income (loss) attributable to noncontrolling interests - Launch Equity	(598)	4,779
Comprehensive income attributable to Artisan Partners Asset Management Inc.	$ 8,840	$ 3,021

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Policy Text Block [Abstract]

Significant Accounting Policies [Text Block]

Note 2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying financial statements are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of such consolidated financial statements have been included. Such interim results are not necessarily indicative of full year results.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting and accordingly they do not include all of the information and footnotes required in the annual consolidated financial statements and accompanying footnotes. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. As a result, the interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in APAM’s latest annual report on Form 10-K.

The accompanying financial statements were prepared in accordance with U.S. GAAP and related rules and regulations of the SEC. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates or assumptions.

Because APAM and Holdings were under common control at the time of the IPO Reorganization, APAM’s acquisition of control of Holdings was accounted for as a transaction among entities under common control. The consolidated financial statements of APAM reflect the following:

• Statements of Financial Condition - The assets, liabilities and equity of Holdings and of APAM have been carried forward at their historical carrying values. The historical partners’ equity or deficit of Holdings is reflected as a noncontrolling interest.

• Statements of Operations, Comprehensive Income and Cash Flows - The historical consolidated statements of Holdings have been consolidated with the statements of operations, comprehensive income and cash flows of APAM.

Principles of consolidation

Artisan’s policy is to consolidate all subsidiaries or other entities in which it has a controlling financial interest and variable interest entities (“VIEs”) of which Artisan is deemed to be the primary beneficiary. The primary beneficiary is deemed to be the entity that has the power to govern the financial and operating policies of the subsidiary so as to obtain benefits from its activities. The consolidated financial statements include the accounts of APAM, all subsidiaries or other entities in which APAM has a direct or indirect controlling financial interest and VIEs of which Artisan is deemed to be the primary beneficiary. All material intercompany balances have been eliminated in consolidation.

Artisan’s wholly-owned subsidiary, Artisan Partners Alternative Investments GP LLC, is the general partner of Artisan Partners Launch Equity LP (“Launch Equity”), a private investment partnership that is considered a VIE. Launch Equity is considered an investment company and therefore is accounted for under ASC Topic 946, Financial Services – Investment Companies. Artisan has retained the specialized industry accounting principles of this investment company in its Consolidated Financial Statements. See Note 8, “Variable and Voting Interest Entities”for additional details.

The Company makes initial seed investments in sponsored investment portfolios at the portfolio’s formation. If the seed investment results in a controlling financial interest, APAM consolidates the investment, and the underlying individual securities are accounted for as trading securities. Seed investments in which the Company does not have a controlling financial interest are classified as available-for-sale investments. As of March 31, 2014, APAM does not have a controlling financial interest in any of its seed investments.

Recent accounting pronouncements

In March 2013, the FASB issued ASU 2013-05, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The ASU clarifies the interaction between ASC 810-10, Consolidation-Overall, and ASC 830-30, Foreign Currency Matters-Translation of Financial Statements, when releasing the cumulative translation adjustment into net income when a parent either sells a part or all of its investment ina foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU was adopted prospectively on January 1, 2014 and did not have an impact on the Company’s consolidated financial statements.

In June 2013, the FASB issued ASU 2013-08, Investment Companies (Topic 946). The ASU changes the approach to the investment company assessment in Topic 946, clarifying the characteristics of an investment company and provides comprehensive guidance for assessing whether an entity is an investment company. This update would also require an investment company to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting and to include additional disclosures. The ASU was adopted prospectively on January 1, 2014 and did not have an impact on the Company’s consolidated financial statements.

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Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Artisan Funds
Related Party Transaction [Line Items]
Due from related parties	$ 3		$ 9
Investment management fees	136,586	98,080
Fee waiver / expense reimbursement	60	121
Annualized operating expenses maximum percentage of average daily net assets	1.50%
Artisan Funds | Minimum
Related Party Transaction [Line Items]
Management fee percentage of average daily net assets	0.63%
Artisan Funds | Maximum
Related Party Transaction [Line Items]
Management fee percentage of average daily net assets	1.25%
Artisan Partners High Income Fund [Domain]
Related Party Transaction [Line Items]
Annualized operating expenses maximum percentage of average daily net assets	1.25%
Artisan Global Funds
Related Party Transaction [Line Items]
Due from related parties	1,200		2,200
Investment management fees	3,239	1,439
Fee waiver / expense reimbursement	82	126
Artisan Global Funds | Minimum
Related Party Transaction [Line Items]
Management fee percentage of average daily net assets	0.75%
Management fee threshold for reimbursement, percentage average daily net assets	0.10%
Artisan Global Funds | Maximum
Related Party Transaction [Line Items]
Management fee percentage of average daily net assets	1.80%
Management fee threshold for reimbursement, percentage average daily net assets	0.20%
Launch Equity
Related Party Transaction [Line Items]
Fee waiver / expense reimbursement	38	40
Management fee as a percentage of closing capital account	1.00%
Percentage of fee expected to be waived in current period	100.00%
Percentage profit allocation	20.00%
AIC
Related Party Transaction [Line Items]
Due from related parties	$ 139		$ 243

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair value hierarchy of assets and liabilities

The following provides the hierarchy of inputs used to derive fair value of Artisan’s assets and liabilities that are financial instruments as of March 31, 2014 and December 31, 2013:

	Assets and Liabilities at Fair Value
	Total		Level 1		Level 2		Level 3
March 31, 2014
Assets
Cash equivalents	$	60,002	$	60,002	$	—	$	—
Mutual funds	17,911		17,911		—		—
December 31, 2013
Assets
Cash equivalents	$	105,001	$	105,001	$	—	$	—
Equity mutual funds	7,804		7,804		—		—

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Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 positions	Mar. 31, 2013	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Purchase of Investment Securities	$ (10,000)	$ (2,000)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	0
Cost	16,190		6,190
Unrealized Gains	1,721		1,614
Unrealized Losses	0		0
Fair Value	$ 17,911		$ 7,804

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Text Block]

Note 12. Accumulated Other Comprehensive Income (loss)

Accumulated other comprehensive income (loss), net of tax, in the accompanying Condensed Consolidated Statements of Financial Condition represents the portion of accumulated other comprehensive income attributable to APAM, and consists of the

following:

	As of March 31, 2014		As of December 31, 2013
Unrealized gain on investments	$	455	$	303
Foreign currency translation	127		75
Accumulated Other Comprehensive Income (Loss)	$	582	$	378

Comprehensive income (loss) attributable to noncontrolling interests - Artisan Partners Holdings in the Consolidated Statements of Comprehensive Income (Loss) represents the portion of comprehensive income (loss) attributable to the economic interests in Holdings held by the limited partners of Holdings. For periods prior to the IPO, all comprehensive income (loss) is entirely attributable to noncontrolling interests.