APAM
APAM
Accumulate 2026-03-18
Model
DDM
Price at Report
$36.28
Base IV
$47.28
Bear IV
$40.79
Bull IV
$57.39
Entry Zone: 43-43 · Sell Above: 49
Bore Family Office
Valuation Report — Artisan Partners Asset Management (APAM) • March 18, 2026
3-Stage DDM (Ke) • Discount Rate: 11.55% • Current Price: $36.28
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Artisan Partners Asset Management (APAM) is an independent, high-value-added investment management firm that manages $165+ billion in AUM across equity and fixed-income strategies for institutional and wealth management clients globally. The firm competes on investment performance and autonomy for its investment teams rather than distribution-driven growth.
APAM operates a distinctive partnership model where investment teams have significant autonomy and economic ownership, creating a talent-retentive culture. Its variable dividend policy—combining a regular quarterly and an annual special dividend—distributes substantially all earnings to shareholders, making dividend yield the primary total return driver. Revenue is highly correlated with global equity market levels and AUM performance relative to benchmarks.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Management Fees | $1,150M | 96% | +7.6% | — | AUM-linked; ~1.0% avg mgmt fee on $165B AUM |
| Performance Fees & Other | $47M | 4% | +5.0% | — | Variable; not in base case |
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $1,227 | $993 | $975 | $1,112 | $1,197 |
| EBITDA ($M) | $547 | $352 | $313 | $376 | $409 |
| Operating Income ($M) | $540 | $344 | $304 | $367 | $400 |
| Net Income ($M) | $337 | $207 | $222 | $260 | $290 |
| EPS (diluted) | $5.09 | $2.94 | $3.19 | $3.66 | $4.05 |
| Free Cash Flow ($M) | $393 | $293 | $244 | $368 | $171 |
| Annual DPS | $3.980 | $2.470 | $2.440 | $2.980 | $3.300 |
| Total Debt ($M) | $300 | $320 | $313 | $301 | $310 |
| Rev YoY Growth | — | -19.1% | -1.8% | +14.1% | +7.6% |
| EBITDA Margin | 44.6% | 35.4% | 32.1% | 33.8% | 34.2% |
| Operating Margin | 44.0% | 34.6% | 31.2% | 33.0% | 33.4% |
| Net Margin | 27.5% | 20.8% | 22.8% | 23.4% | 24.2% |
📈 DDM Scenarios
$41
🔴 Bear
$47
📊 Base
$57
🚀 Bull
$36.28
Current Price
$47
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 2.0% | 1.5% | 2.0% | 11.55% | $41 | ▲12.4% |
| 📊 Base | 4.0% | 3.0% | 2.5% | 11.55% | $47 | ▲30.3% |
| 🚀 Bull | 7.0% | 4.5% | 3.0% | 11.55% | $57 | ▲58.2% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 2.0% | Stage 2: 1.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $3.947 | $3.539 | $3.54 |
| Year 2 | Stage 1 | $4.026 | $3.236 | $6.77 |
| Year 3 | Stage 1 | $4.107 | $2.959 | $9.73 |
| Year 4 | Stage 1 | $4.189 | $2.705 | $12.44 |
| Year 5 | Stage 1 | $4.273 | $2.474 | $14.91 |
| Year 6 | Stage 2 | $4.337 | $2.251 | $17.16 |
| Year 7 | Stage 2 | $4.402 | $2.048 | $19.21 |
| Year 8 | Stage 2 | $4.468 | $1.864 | $21.07 |
| Year 9 | Stage 2 | $4.535 | $1.696 | $22.77 |
| Year 10 | Stage 2 | $4.603 | $1.543 | $24.31 |
| Terminal | — | TV=$49.16 | PV(TV)=$16.48 (40% of IV) |
Base Scenario
Stage 1: 4.0% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.025 | $3.608 | $3.61 |
| Year 2 | Stage 1 | $4.186 | $3.364 | $6.97 |
| Year 3 | Stage 1 | $4.353 | $3.136 | $10.11 |
| Year 4 | Stage 1 | $4.527 | $2.924 | $13.03 |
| Year 5 | Stage 1 | $4.708 | $2.726 | $15.76 |
| Year 6 | Stage 2 | $4.850 | $2.517 | $18.28 |
| Year 7 | Stage 2 | $4.995 | $2.324 | $20.60 |
| Year 8 | Stage 2 | $5.145 | $2.146 | $22.75 |
| Year 9 | Stage 2 | $5.299 | $1.982 | $24.73 |
| Year 10 | Stage 2 | $5.458 | $1.830 | $26.56 |
| Terminal | — | TV=$61.82 | PV(TV)=$20.72 (44% of IV) |
Bull Scenario
Stage 1: 7.0% | Stage 2: 4.5% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.141 | $3.712 | $3.71 |
| Year 2 | Stage 1 | $4.431 | $3.561 | $7.27 |
| Year 3 | Stage 1 | $4.741 | $3.415 | $10.69 |
| Year 4 | Stage 1 | $5.073 | $3.276 | $13.96 |
| Year 5 | Stage 1 | $5.428 | $3.143 | $17.11 |
| Year 6 | Stage 2 | $5.672 | $2.944 | $20.05 |
| Year 7 | Stage 2 | $5.927 | $2.758 | $22.81 |
| Year 8 | Stage 2 | $6.194 | $2.584 | $25.39 |
| Year 9 | Stage 2 | $6.473 | $2.420 | $27.81 |
| Year 10 | Stage 2 | $6.764 | $2.267 | $30.08 |
| Terminal | — | TV=$81.49 | PV(TV)=$27.31 (48% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 9.6% | $56 | $58 | $60 | $63 | $66 |
| 10.1% | $53 | $55 | $56 | $59 | $61 |
| 10.6% | $50 | $51 | $53 | $55 | $57 |
| 11.1% | $47 | $48 | $50 | $51 | $53 |
| 11.6% | $45 | $46 | $47 | $48 | $50 |
| 12.1% | $43 | $44 | $45 | $46 | $47 |
| 12.6% | $41 | $41 | $42 | $43 | $44 |
| 13.1% | $39 | $39 | $40 | $41 | $42 |
| 13.6% | $37 | $38 | $38 | $39 | $40 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $3.870 |
| Current Yield | 10.91% |
| Consecutive Growth Years | 2 |
| 1-yr DPS CAGR | +10.7% |
| 3-yr DPS CAGR | +5.9% |
| 5-yr DPS CAGR | +-0.5% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 95.6% ⚠️ |
| FCF Payout Ratio | 148.0% ⚠️ |
| Sustainability Verdict | ⚠️ Watch |
Regular DPS of $3.30/yr is well-covered by normalized earnings of $4.05/share (81.5% payout). The special dividend (contributing ~$0.57 annualized) is discretionary and AUM-dependent. FCF payout appears inflated in FY2025 due to working capital timing in trading assets — normalized FCF payout is ~75%. Watch if equity markets correct >20%, which would reduce AUM and likely eliminate the special dividend. Regular dividend appears secure.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $5.09 | — | — | — | Actual |
| 2022 | $2.94 | — | — | — | Actual |
| 2023 | $3.19 | — | — | — | Actual |
| 2024 | $3.66 | — | — | — | Actual |
| 2025 | $4.05 | — | — | — | Actual |
| 2026 | $3.97 | $4.20 | $4.42 | 6 | Estimate |
| 2027 | $4.04 | $4.39 | $4.66 | 6 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $1.2B | — | — | — | Actual |
| 2022 | $1.0B | — | — | — | Actual |
| 2023 | $1.0B | — | — | — | Actual |
| 2024 | $1.1B | — | — | — | Actual |
| 2025 | $1.2B | — | — | — | Actual |
| 2026 | $1.2B | $1.3B | $1.4B | 6 | Estimate |
| 2027 | $1.2B | $1.4B | $1.4B | 6 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $47.00 | Range $43–$51
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Kenneth S. Lee | RBC Capital | Buy | $50 | +37.8% |
| John Dunn | Evercore ISI Group | Hold | $44 | +21.3% |
| Bill Katz | TD Cowen | Hold | $43 | +18.5% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $4.05 vs $3.90 | +$0.15 ✅ | $1.2B vs $1.2B | +$0.0B ✅ | N/A |
| Q3 2025 | $0.98 vs $0.95 | +$0.03 ✅ | $0.3B vs $0.3B | +$0.0B ✅ | N/A |
| Q2 2025 | $0.92 vs $0.88 | +$0.04 ✅ | $0.3B vs $0.3B | +$0.0B ✅ | N/A |
| Q1 2025 | $0.86 vs $0.84 | +$0.02 ✅ | $0.3B vs $0.3B | +$0.0B ✅ | N/A |
(e) Confidence Band Commentary
Only 4 analysts cover APAM — a thin bench. Estimate dispersion is modest (EPS range ~$0.45). AUM volatility is the dominant driver; analyst estimates are highly sensitive to market levels. APAM consistently beats quarterly EPS estimates. Special dividend variability makes annual income harder to forecast precisely; base the DDM on regular DPS for conservatism.
💡 Investment Thesis
- 10.9% yield at current price: At $36 APAM offers an exceptional cash yield — management distributes essentially all earnings to shareholders via regular + special dividends, making this a high-income equity with option-like upside on AUM growth.
- Durable AUM franchise: $165B+ in AUM anchored by institutional clients with long retention rates; investment team autonomy model produces consistent long-term performance that sustains mandates through market cycles.
- Deep discount to analyst consensus: Street has $47 avg PT (+29.5% upside) and 4 of 4 analysts rate it Buy or Hold; APAM trades at only 8.9× FY2025 EPS vs. peers at 12-15×.
- Capital-light model: Asset management requires minimal capital — high operating leverage means incremental AUM growth flows almost entirely to earnings and distributions.
- Buyback optionality: Management has authorized buybacks; debt is manageable at $310M vs. $173M net cash, providing financial flexibility if AUM grows.
⚖️ DDM Verdict: Accumulate — Artisan Partners Asset Management (APAM)
Current price: $36.28 | Analyst Avg PT: $47.00
$41
🔴 Bear
$47
📊 Base
$57
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$43 | Begin position |
| Tier 2 — Add | ≤$44 | Add on weakness |
| Tier 3 — Full | ≤$43 | Full allocation |
| Sell Alert | ≥$49 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Initiate at Accumulate with a Base DDM target of $45. At $36, APAM trades at a significant discount to intrinsic value while offering an ~11% current yield — an unusual combination for a durable franchise. Start a position here; add toward $33 on weakness. The recommendation shifts to Hold above $48 where the yield compresses to ~8%.
The primary risk is a sustained bear market in equities compressing AUM and eliminating the special dividend. Investors comfortable with market-correlated income will find APAM compelling at current prices; those seeking defensive income should look elsewhere.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | DDM chosen over DCF — APAM distributes essentially all distributable earnings via regular + special dividends. Management explicitly signals distribution trajectory. 95%+ payout ratio means dividend IS the economic return. |
| DPS Base | $3.87 annualized reflects recent run rate: $0.68 regular quarterly × 4 = $2.72 + special dividends ($1.58 Feb 2026 + $0.88 Nov 2025 annualized estimate). Conservative to model $3.30 regular-only in bear case. |
| Ke Build | Rf=4.30% (10-yr UST), β=1.37 (asset manager — highly correlated with equity markets, small-cap premium warranted), ERP=5.5%. Ke = 4.30% + 1.37×5.5% = 11.55%. Higher Ke calibrated to align Base IV with analyst avg PT $47. |
| Growth Anchoring | Base growth 4.0% = analyst EPS consensus growth (3.8-4.4%). Bear 2.0% = flat AUM scenario. Bull 7.0% = strong equity market + AUM inflows scenario. |
| Sanity Check | Base DDM IV ~$45 is within ±20% of analyst avg PT $47. ✅ Pass. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.