Artisan Jumps in Trading Debut After Pricing IPO Above RangeDevin Banerjee and Lee Spears
Artisan Partners Asset Management Inc., the Milwaukee-based money manager that withdrew plans to go public in 2011, jumped in trading after pricing its initial public offering above the proposed range.
The shares advanced 29 percent to $38.83 in its first day of New York trading, after earlier climbing as high as $39.50. Artisan raised $332 million yesterday, selling 11.1 million shares for $30 each, according to data compiled by Bloomberg. The firm had offered 11.5 million shares, equivalent to a 17 percent stake, for $27 to $29 apiece.
Artisan, which offers a dozen U.S. and non-U.S. equity investment strategies, proceeded with the IPO as markets have rebounded since its first attempt, with the Dow Jones Industrial Average surging 17 percent since the end of 2011 and closing at record levels this week. Equity mutual funds in the U.S. attracted $54 billion in the first seven weeks of the year, according to data from the Investment Company Institute.
“They hit the market at probably one of the best times that one can do this,” Geoff Bobroff, a fund consultant in East Greenwich, Rhode Island, said in a telephone interview. “The market is very focused on equities and global equities, and here’s a manager that is very much steeped in those areas. One can see why the stock has gotten a pop today.”
Artisan, led by Executive Chairman Andrew Ziegler and Chief Executive Officer Eric Colson, offers funds including the top-performing Artisan International Value Fund, which beat 99 percent of peers over the past five years, according to data compiled by Bloomberg. The Artisan Mid Cap Value Fund beat 97 percent of rivals over the past five years. The team that runs the fund won Morningstar Inc.’s award for best domestic stock-fund manager in 2011.
Net income fell 75 percent in 2012 to $33.8 million as expenses related to compensation climbed, according to regulatory filings. Assets surged 30 percent in 2012 to $74 billion.
Artisan planned to use $90 million of the sale’s proceeds to repay debt, $67.1 million to buy shares from early investors and $61.3 million to pay a distribution to pre-IPO partners, according to regulatory filings. The company also had said it would distribute $56.8 million to portfolio managers and $40 million to partners before the sale.
“There was certainly demand for the offering, as it was oversubscribed,” said Bobroff. “The real question now, after the market follow-on, is how to keep the price up.”
Citigroup Inc. and Goldman Sachs Group Inc. led the offering. The company is listed under the symbol APAM on the New York Stock Exchange.