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Artio Global Investors Inc. : Artio Global Investors Reports Third Quarter 2011 Results; Announces Quarterly Dividend of $0.06 Per Share

10/27/2011 | 07:05am US/Eastern

Artio Global Investors Inc. (NYSE: ART) ("Artio Global Investors", together with its subsidiaries, "Artio Global" or the "Company") today reported its results for the quarter ended September 30, 2011.

Financial Update

  • Adjusted1 net income attributable to Artio Global Investors of $15.9 million, or $0.27 per diluted share, for the third quarter of 2011 (GAAP net income attributable to Artio Global Investors of $6.4 million, or $0.11 per diluted share)
  • Assets under management of $34.3 billion as of September 30, 2011
  • Investment management fees of $65.6 million for the third quarter of 2011
  • Effective fee rate2 of 62.4 basis points for the third quarter of 2011
  • Adjusted operating margin of 50.0% for the third quarter of 2011
  • Quarterly dividend of $0.06 per share on Class A common stock

The Company's GAAP results include a previously announced compensation charge (the "Compensation Charge") of $7.6 million related to organizational changes designed to lower the Company's operating costs and more efficiently manage resources for current business conditions. The Compensation Charge reduced GAAP net income attributable to Artio Global Investors by $0.08 per diluted share for the third quarter of 2011. The Company's adjusted results exclude the Compensation Charge.

The Company's adjusted results for all periods assume the Principals'3 non-controlling interests have been fully exchanged for shares of Class A common stock and exclude the amortization of restricted stock units ("RSUs") granted at the time of the Company's initial public offering ("IPO"). Adjusted results are presented to provide more meaningful comparisons between periods.

The Company's adjusted non-operating loss for the third quarter of 2011 of $4.7 million (GAAP non-operating loss of $6.2 million) includes non-operating losses of $4.3 million on seed capital investments, primarily reflecting market depreciation.

For the third quarter of 2011, adjusted net income attributable to Artio Global Investors was $15.9 million, or $0.27 per diluted share, a decrease of 32% and 31%, respectively, from adjusted net income attributable to Artio Global Investors of $23.3 million, or $0.39 per diluted share, for the second quarter of 2011, and a decrease in each case of 33% from adjusted net income attributable to Artio Global Investors of $23.8 million, or $0.40 per diluted share, for the third quarter of 2010.

On a GAAP basis, net income attributable to Artio Global Investors for the third quarter of 2011 was $6.4 million, or $0.11 per diluted share, a decrease of 70% and 69%, respectively, from net income attributable to Artio Global Investors of $21.2 million, or $0.36 per diluted share, for the second quarter of 2011, and a decrease in each case of 68% from adjusted net income attributable to Artio Global Investors of $20.0 million, or $0.34 per diluted share, for the third quarter of 2010.

For the first nine months of 2011, adjusted net income attributable to Artio Global Investors was $63.4 million, or $1.06 per diluted share, a decrease in each case of 16% from adjusted net income attributable to Artio Global Investors of $75.7 million, or $1.26 per diluted share, for the first nine months of 2010.

On a GAAP basis, net income attributable to Artio Global Investors for the first nine months of 2011 was $49.6 million, or $0.85 per diluted share, a decrease of 14% and 25%, respectively, from net income attributable to Artio Global Investors of $57.8 million, or $1.13 per diluted share, for the first nine months of 2010.

The following tables compare the Company's GAAP results and adjusted results. See Exhibits 3 - 5 of this news release for a reconciliation of GAAP results to adjusted results.

     
Three Months Ended

(in millions, except per share amounts)

 

Sep. 30,
2011

 

Sep. 30,
2010

 

%
Change

 

Jun. 30,
2011

 

%
Change

Revenue4, GAAP

$ 63.8 $ 80.9 (21 %) $ 78.2 (18 %)
Operating income, GAAP $ 21.2 $ 39.9 (47 %) $ 36.8 (42 %)
Operating income, adjusted $ 31.9 $ 42.5 (25 %) $ 39.5 (19 %)
Net income attributable to Artio Global Investors, GAAP

$

6.4

$

20.0

(68

%)

$

21.2

(70

%)

Net income attributable to Artio Global Investors, adjusted

$

15.9

$

23.8

(33

%)

$

23.3

(32

%)

Diluted EPS, GAAP $ 0.11 $ 0.34 (68 %) $ 0.36 (69 %)
Diluted EPS, adjusted $ 0.27 $ 0.40 (33 %) $ 0.39 (31 %)
 
Nine Months Ended

(in millions, except per share amounts)

Sep. 30,
2011

Sep. 30,
2010

%
Change

Revenue4, GAAP

$ 224.1 $ 249.9 (10 %)
Operating income, GAAP $ 97.2 $ 128.2 (24 %)
Operating income, adjusted $ 113.1 $ 136.5 (17 %)
Net income attributable to Artio Global Investors, GAAP

$

49.6

$

57.8

(14

%)

Net income attributable to Artio Global Investors, adjusted

$

63.4

$

75.7

(16

%)

Diluted EPS, GAAP $ 0.85 $ 1.13 (25 %)
Diluted EPS, adjusted   $ 1.06   $ 1.26   (16 %)        

Business Update5

  • Four of the Company's nine eligible mutual funds6 were in the top quartile of Lipper performance rankings for the three-year period ended September 30, 2011
  • Five of the Company's nine eligible mutual funds7 were in the top third of Lipper performance rankings for the five-year period ended September 30, 2011
  • Net client cash outflows were $4.2 billion for the third quarter of 2011

Management Commentary

"The third quarter saw sharply lower equity markets and a return to heightened levels of volatility," said Richard Pell, Chairman, Chief Executive Officer and Chief Investment Officer. "Against this market backdrop, it proved to be a challenging quarter for our International Equity strategies, although we were pleased to see some moderation in outflows from our open International Equity II strategy. We continue to have a high degree of conviction in our portfolio positioning, particularly around the rise of the emerging market consumer, taking a considered long?term approach even at the risk of short?term underperformance."

"We are encouraged by the potential for growth within our fixed income strategies that will serve to diversify our business. During the third quarter, our High Grade Fixed Income strategy increased its asset base, and produced another quarter of strong performance relative to its peer group. After the recent sell?off, high yield is increasingly being viewed as under?priced, with industry fund flows swinging back to positive since quarter end. Given our strategy's strong long?term performance, we believe that we are well?positioned to participate."

"On the equity side, we also remain confident that our four US Equity strategies are well-positioned to generate inflows, given the strength of their three- and five-year track records. Although US investors currently lack focus on the asset class, we are encouraged by the early stage inquiries that we are seeing from European investors."

"Additionally, we announced organizational changes during the third quarter designed to right?size our business and repurchased stock as part of our ongoing capital management."

Third Quarter of 2011 Comparison with Third Quarter of 2010

Assets Under Management and Net Client Cash Flows

Assets under management were $34.3 billion as of September 30, 2011, down $19.6 billion, or 36%, from $53.9 billion as of September 30, 2010, due to net client cash outflows and market depreciation.

Net client cash outflows for the third quarter of 2011 were $4.2 billion, driven primarily by net client cash outflows from our International Equity I and II strategies, and our High Yield strategy.8

Revenues and Other Operating Income

Revenues and other operating income for the third quarter of 2011 totaled $63.8 million, down 21% from $80.9 million for the third quarter of 2010. The decrease was driven primarily by lower investment management fees of $65.6 million for the third quarter of 2011, down 18% from $80.2 million for the third quarter of 2010, due primarily to lower average assets under management.

Expenses

Employee Compensation and Benefits

For the third quarter of 2011, adjusted employee compensation and benefits expenses were $17.7 million, down 20% from $22.2 million for the third quarter of 2010. The decrease was due primarily to lower incentive compensation accruals, partly offset by accruals related to the Company's long-term incentive plan implemented in 2011.

GAAP employee compensation and benefits expenses for the third quarter of 2011 were $28.4 million, up 15% from $24.8 million for the third quarter of 2010, due primarily to the Compensation Charge, partly offset by the reasons noted above.

Shareholder Servicing and Marketing Expenses

Shareholder servicing and marketing expenses for the third quarter of 2011 were $4.7 million, down 6% from $5.0 million for the third quarter of 2010, driven primarily by lower marketing expenses and a decline in custody fees.

General and Administrative Expenses

General and administrative expenses for the third quarter of 2011 were $9.5 million, a decrease of 16% from $11.2 million for the third quarter of 2010, due primarily to a decline in client-related trading errors and lower professional fees.

Income Taxes

For the third quarter of 2011, the adjusted effective tax rate was 41.4%, 2.0 percentage points lower than the 43.4% adjusted effective tax rate for the third quarter of 2010. The decrease was due primarily to a lower apportionment of income for state and local tax purposes in the third quarter of 2011.

The GAAP effective tax rate was 64.9% for the third quarter of 2011, 17.5 percentage points higher than the 47.4% GAAP effective tax rate for the third quarter of 2010. The increase was due primarily to a larger impact in the third quarter of 2011 from the write-off of deferred tax assets related to the vesting of RSUs granted at the time of the IPO, at prices below their grant date fair value, and the inability to record a tax benefit on non-operating losses attributable to the non-controlling interests' economic ownership in the Consolidated Investment Products.

Third Quarter of 2011 Comparison with Second Quarter of 2011

Assets Under Management

Assets under management were $34.3 billion as of September 30, 2011, a decrease of $12.6 billion, or 27%, from $46.8 billion as of June 30, 2011, due to market depreciation of $8.4 billion and net client cash outflows of $4.2 billion.

Revenues and Other Operating Income

Revenues and other operating income for the third quarter of 2011 totaled $63.8 million, down 18% from $78.2 million for the second quarter of 2011, driven primarily by lower investment management fees. Investment management fees were $65.6 million for the third quarter of 2011, down 16% from $78.2 million for the second quarter of 2011, due primarily to a decrease in average assets under management.

Expenses

Employee Compensation and Benefits

For the third quarter of 2011, adjusted employee compensation and benefits expenses were $17.7 million, down 24% from $23.2 million for the second quarter of 2011, due primarily to a decrease in incentive compensation accruals.

GAAP employee compensation and benefits expenses for the third quarter of 2011 were $28.4 million, up 10% from $25.8 million for the second quarter of 2011, due primarily to the Compensation Charge, partly offset by the reason noted above.

Shareholder Servicing and Marketing Expenses

Shareholder servicing and marketing expenses for the third quarter of 2011 were $4.7 million, a decrease of 9% from $5.2 million for the second quarter of 2011, due primarily to a decrease in marketing expenses.

General and Administrative Expenses

General and administrative expenses were $9.5 million for the third quarter of 2011, a decrease of 9% from $10.4 million for the second quarter of 2011, due primarily to lower professional fees.

Income Taxes

For the third quarter of 2011, the adjusted effective tax rate was 41.4%, 0.5 percentage points higher than the 40.9% adjusted effective tax rate for the second quarter of 2011.

The GAAP effective tax rate was 64.9% for the third quarter of 2011, 24.3 percentage points higher than the 40.6% GAAP effective tax rate for the second quarter of 2011, due primarily to the write-off of deferred tax assets related to the vesting of RSUs granted at the time of the IPO, at a price below their grant date fair value, and the inability to record a tax benefit on non-operating losses attributable to the non-controlling interests' economic ownership in the Consolidated Investment Products.

Liquidity and Capital

As of September 30, 2011, the Company had cash and cash equivalents (excluding amounts held in consolidated investment products) of $89.2 million, investments held for deferred compensation of $9.8 million and an undrawn $100.0 million committed revolving credit facility. During the third quarter of 2011, in accordance with the terms of the credit agreement, the Company repaid $4.5 million of its term debt facility, reducing the outstanding balance to $42.0 million.

Total stockholders' equity on the Statement of Financial Position was $153.7 million as of September 30, 2011, compared to $103.6 million as of December 31, 2010.

Share Repurchase

During the third quarter of 2011 the Company repurchased and retired 773,939 shares of Class A common stock at an average cost of $8.77 in connection with the 3,000,000 share repurchase program previously announced. As of September 30, 2011, the Company retains authorization to repurchase 2,226,061 shares of its common stock through December 31, 2013.

Shares

As of September 30, 2011, the total number of shares of Class A and Class B common stock outstanding was 59,251,113.

On September 29, 2011, in accordance with the Company's certificate of incorporation, 16,755,844 shares of Class C common stock held by our former sole stockholder, GAM Holding AG, were converted to an equal amount of shares of Class A common stock.

For purposes of calculating adjusted earnings per diluted share, the Principals' New Class A Units, held in the intermediate holding company as of the beginning of the period are assumed to have been fully exchanged into shares of Class A common stock on the first day of the period.

Dividend

On October 24, 2011, the Board of Directors declared a dividend of $0.06 per share on the Class A common stock for the third quarter of 2011, which is payable on November 22, 2011, to stockholders of record as of the close of business on November 9, 2011.

Teleconference and Webcast Details

The Company will host a conference call for analysts and investors to review third quarter 2011 results, today, October 27, 2011, beginning at 8:00 a.m. (Eastern Time). The call will be open to the public and can be accessed by dialing +1-888-680-0860 (inside the United States) or +1-617-213-4852 (outside the United States). The number should be dialed at least ten minutes prior to the start of the call. The passcode for the call will be 15606585. A simultaneous webcast of the call (on a listen-only basis), as well as an audio replay, will be available at www.ir.ArtioGlobal.com.

About Us

Artio Global Investors is the indirect holding company of Artio Global Management LLC ("Artio Global"), a registered investment adviser that actively invests in global equity and fixed income markets, primarily for institutional and intermediary clients. Headquartered in New York, Artio Global has offices in Los Angeles, Toronto, London and Sydney.

Best known for International Equity, Artio Global also offers a select group of other equity and fixed income investment strategies, including Global Equity, a series of US Equity strategies, High Grade Fixed Income, High Yield and Local Emerging Markets Debt. Access to these strategies is offered through a variety of investment vehicles including separate accounts, commingled funds and mutual funds.

Since 1995 our investment professionals have built a successful long-term track record by taking an unconventional approach to investing. Based on a philosophy of style-agnostic investing across a broad range of opportunities, we have consistently pursued a global approach that we believe provides critical insights, thereby adding value for clients over the long term.

For more information, please visit www.artioglobal.com.

Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this news release may, and the related remarks do, contain forward?looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the intrinsic value of our common stock, investor behavior, net client cash flows, our compensation costs and adjusted compensation ratio, future tax rate, use of our free cash flow, potential share repurchases and declaration of dividends. These forward?looking statements are based on the Company's current assumptions, expectations and projections about future events. Words like "believe", "anticipate", "intend", "estimate", "expect", "project", and similar expressions are used to identify forward?looking statements, although not all forward-looking statements contain these words. These forward?looking statements discuss matters that necessarily involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward?looking statements.

Among the factors that could cause actual results to differ from those expressed or implied by a forward?looking statement are those described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's report on Form 10?K (File No. 001?34457) filed with the Securities and Exchange Commission on February 25, 2011. Other unknown or unpredictable factors also could have material adverse effects on the Company's future results, performance, or achievements.

Any forward?looking statements in this news release and the related remarks speak only as of the date of this news release. The related remarks may contain information about the Company subsequent to September 30, 2011. The Company is not under any obligation and does not intend to make publicly available any update or other revisions to any forward?looking statements to reflect circumstances existing after the date of this release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward?looking statements will not be realized.

Fund Performance and Other Disclaimers

Lipper rankings are for Class I mutual fund shares with three- and five-year track records only. Other classes may have different performance characteristics. Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds and fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period.

Morningstar rankings are for Class I mutual fund shares with a minimum three-year track record. For each mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating? based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. A fund's independent Morningstar Rating metric is then compared against the mutual fund universe breakpoints to determine its hypothetical rating.

Data presented reflect past performance, which is no guarantee of future results. © 2011 Morningstar, Inc. All Rights Reserved.

This news release is not, and should not be considered, sales material and is not an offer or a solicitation for any securities.

1 See Exhibits 3 - 5 of this news release for a reconciliation of the Company's U.S. GAAP results to its non-GAAP adjusted results ("adjusted").

2 Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.

3 Richard Pell, Chairman, Chief Executive Officer and Chief Investment Officer, and Rudolph-Riad Younes, Head of International and Global Equities, are collectively referred to as the "Principals".

4 Represents total revenues and other operating income.

5 See section entitled "Fund Performance and Other Disclaimers" and Exhibit 8 of this news release for further information about Lipper and Morningstar rankings.

6 Class I mutual fund shares with a three-year track record; other classes may have different performance characteristics.

7 Class I mutual fund shares with a five-year track record; other classes may have different performance characteristics.

8 See Exhibit 7 for more information on "Assets under Management by Investment Strategy".

 

Exhibit - 1

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts or as noted)
           
Three Months Ended % Change From Nine Months Ended % Change From

Sep. 30,
2011

Sep. 30,
2010

Jun. 30,
2011

Sep. 30,
2010

Jun. 30,
2011

Sep. 30,
2011

Sep. 30,
2010

Sep. 30,
2010

Revenues and other operating income:
Investment management fees $ 65,576 $ 80,173 $ 78,209 (18 %) (16 %) $ 225,561 $ 249,301 (10 %)
Net gains (losses) on securities held for deferred compensation (1,798 ) 722 (56 ) NM NM (1,435 ) 582 NM
Foreign currency gains (losses)   6     35     (2 ) (83 %) NM   (14 )   13   NM
Total revenues and other operating income   63,784     80,930     78,151   (21 %) (18 %)   224,112     249,896   (10 %)
 
Expenses:
Employee compensation and benefits 28,387 24,772 25,812 15 % 10 % 82,217 74,588 10 %
Shareholder servicing and marketing 4,708 5,031 5,163 (6 %) (9 %) 14,736 15,177 (3 %)
General and administrative   9,470     11,224     10,357   (16 %) (9 %)   29,999     31,954   (6 %)
Total expenses   42,565     41,027     41,332   4 % 3 %   126,952     121,719   4 %
 
Operating income before income tax expense 21,219 39,903 36,819 (47 %) (42 %) 97,160 128,177 (24 %)
 
Non-operating loss   (6,190 )   (431 )   (156 ) NM NM   (5,781 )   (1,740 ) NM
Income before income tax expense 15,029 39,472 36,663 (62 %) (59 %) 91,379 126,437 (28 %)
 
Income taxes   9,753     18,717     14,869   (48 %) (34 %)   41,373     49,376   (16 %)
Net income 5,276 20,755 21,794 (75 %) (76 %) 50,006 77,061 (35 %)
 
Net income attributable to non-controlling interests in AGH (1) 319 756 719 (58 %) (56 %) 1,807 19,239 (91 %)
Net loss attributable to non-controlling interests in CIP (2)   (1,456 )   -     (75 ) NM NM   (1,396 )   -   NM
Net income attributable to Artio Global Investors $ 6,413   $ 19,999   $ 21,150   (68 %) (70 %) $ 49,595   $ 57,822   (14 %)
 
Net income per share attributable to Artio Global Investors:
Basic $ 0.11 $ 0.34 $ 0.36 (68 %) (69 %) $ 0.85 $ 1.14 (25 %)
Diluted $ 0.11 $ 0.34 $ 0.36 (68 %) (69 %) $ 0.85 $ 1.13 (25 %)
 

Weighted average shares used in net income per share attributable to Artio Global Investors:

Basic 58,157,478 58,678,738 58,392,969 (1 %) 0 % 58,300,638 50,906,739 15 %
Diluted (3) 58,403,338 59,012,436 58,576,859 (1 %) 0 % 58,430,802 51,136,951 14 %
 
NM - Not Meaningful
                                       
 
Assets under management ($ in millions) $ 34,252 $ 53,860 $ 46,835 (36 %) (27 %) $ 34,252 $ 53,860 (36 %)
 
Average assets under management ($ in millions) (4) $ 41,670 $ 51,004 $ 49,783 (18 %) (16 %) $ 47,829 $ 52,945 (10 %)
 
Effective fee rate (basis points) (5) 62.4 62.4 63.0 63.1 63.0
 
Effective tax rate 64.9 % 47.4 % 40.6 % 45.3 % 39.1 %
 

Employee compensation and benefits as a percentage of total revenues and other operating income (6)

44.5 % 30.6 % 33.0 % 36.7 % 29.8 %
 
Operating margin (7) 33.3 % 49.3 % 47.1 % 43.4 % 51.3 %
                                       
1. Represents non-controlling interests in Artio Global Holdings LLC.
2. Represents non-controlling interests in Consolidated Investment Products.
3. The effect of the assumed conversion of the Principals' New Class A units was antidilutive for the three and nine months ended Sep. 30, 2011 and 2010, and the three months ended Jun. 30, 2011.
4. Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period.
5. Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.
6. Calculated as employee compensation and benefits expense divided by total revenues and other operating income.
7. Calculated as operating income before income tax expense divided by total revenues and other operating income.
             

Exhibit - 2

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts or as noted)
   
Three Months Ended % Change From Nine Months Ended % Change From

Sep. 30,
2011

Sep. 30,
2010

Jun. 30,
2011

Sep. 30,
2010

Jun. 30,
2011

Sep. 30,
2011

Sep. 30,
2010

Sep. 30,
2010

Revenues and other operating income:
Investment management fees $ 65,576 $ 80,173 $ 78,209 (18 %) (16 %) $ 225,561 $ 249,301 (10 %)
Net gains (losses) on securities held for deferred compensation (1,798 ) 722 (56 ) NM NM (1,435 ) 582 NM
Foreign currency gains (losses)   6     35     (2 ) (83 %) NM   (14 )   13   NM
Total revenues and other operating income   63,784     80,930     78,151   (21 %) (18 %)   224,112     249,896   (10 %)
 
Expenses:
Employee compensation and benefits 17,714 22,177 23,168 (20 %) (24 %) 66,276 66,222 0 %
Shareholder servicing and marketing 4,708 5,031 5,163 (6 %) (9 %) 14,736 15,177 (3 %)
General and administrative   9,470     11,224     10,357   (16 %) (9 %)   29,999     31,954   (6 %)
Total expenses   31,892     38,432     38,688   (17 %) (18 %)   111,011     113,353   (2 %)
 
Operating income before income tax expense 31,892 42,498 39,463 (25 %) (19 %) 113,101 136,543 (17 %)
 
Non-operating loss   (4,734 )   (431 )   (81 ) NM NM   (4,385 )   (1,740 ) (152 %)
Income before income tax expense 27,158 42,067 39,382 (35 %) (31 %) 108,716 134,803 (19 %)
 
Income taxes   11,245     18,267     16,109   (38 %) (30 %)   45,350     59,121   (23 %)
Net income 15,913 23,800 23,273 (33 %) (32 %) 63,366 75,682 (16 %)
 
Net income attributable to non-controlling interests in AGH (1) - - - NM NM - - NM
Net loss attributable to non-controlling interests in CIP (2)   -     -     -   NM NM   -     -   NM
Net income attributable to Artio Global Investors $ 15,913   $ 23,800   $ 23,273   (33 %) (32 %) $ 63,366   $ 75,682   (16 %)
 
Net income per diluted share attributable to Artio Global Investors $ 0.27 $ 0.40 $ 0.39 (33 %) (31 %) $ 1.06 $ 1.26 (16 %)
 

Weighted average diluted shares used in net income per share attributable to Artio Global Investors

59,603,338 60,212,436 59,776,859 (1 %) 0 % 59,630,802 60,240,248 (1 %)
 
NM - Not Meaningful
                                       
 
Assets under management ($ in millions) $ 34,252 $ 53,860 $ 46,835 (36 %) (27 %) $ 34,252 $ 53,860 (36 %)
 
Average assets under management ($ in millions) (3) $ 41,670 $ 51,004 $ 49,783 (18 %) (16 %) $ 47,829 $ 52,945 (10 %)
 
Effective fee rate (basis points) (4) 62.4 62.4 63.0 63.1 63.0
 
Effective tax rate 41.4 % 43.4 % 40.9 % 41.7 % 43.9 %
 

Employee compensation and benefits as a percentage of total revenues and other operating income (5)

27.8 % 27.4 % 29.6 % 29.6 % 26.5 %
 
Operating margin (6) 50.0 % 52.5 % 50.5 % 50.5 % 54.6 %
                                       
1. Represents non-controlling interests in Artio Global Holdings LLC.
2. Represents non-controlling interests in Consolidated Investment Products.
3. Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period.
4. Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.
5. Calculated as employee compensation and benefits expense divided by total revenues and other operating income.
6. Calculated as operating income before income tax expense divided by total revenues and other operating income.
             

Exhibit - 3

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts)
   
See Exhibit 5 for notes describing adjustments set forth below.
 
 

Three Months Ended Sep. 30, 2011

Three Months Ended Sep. 30, 2010

Three Months Ended Jun. 30, 2011

GAAP Adjustments Adjusted GAAP Adjustments Adjusted GAAP Adjustments Adjusted
Revenues and other operating income:
Investment management fees $ 65,576 $ - $ 65,576 $ 80,173 $ - $ 80,173 $ 78,209 $ - $ 78,209
Net gains (losses) on securities held for deferred compensation (1,798 ) - (1,798 ) 722 - 722 (56 ) - (56 )
Foreign currency gains (losses)   6     -     6     35     -     35     (2 )   -     (2 )
Total revenues and other operating income   63,784     -     63,784     80,930     -     80,930     78,151     -     78,151  
 
Expenses:
Employee compensation and benefits 28,387 (10,673 ) (a) 17,714 24,772 (2,595 ) (a) 22,177 25,812 (2,644 ) (a) 23,168
Shareholder servicing and marketing 4,708 - 4,708 5,031 - 5,031 5,163 - 5,163
General and administrative   9,470     -     9,470     11,224     -     11,224     10,357     -     10,357  
Total expenses   42,565     (10,673 )   31,892     41,027     (2,595 )   38,432     41,332     (2,644 )   38,688  
 
Operating income before income tax expense 21,219 10,673 31,892 39,903 2,595 42,498 36,819 2,644 39,463
 
Non-operating loss   (6,190 )   1,456   (e)   (4,734 )   (431 )   -     (431 )   (156 )   75   (e)   (81 )
Income before income tax expense 15,029 12,129 27,158 39,472 2,595 42,067 36,663 2,719 39,382
 
Income taxes   9,753     1,492   (b)   11,245     18,717     (450 ) (b)   18,267     14,869     1,240   (b)   16,109  
Net income 5,276 10,637 15,913 20,755 3,045 23,800 21,794 1,479 23,273
 
Net income attributable to non-controlling interests in AGH 319 (319 ) (c) - 756 (756 ) (c) - 719 (719 ) (c) -
Net loss attributable to non-controlling interests in CIP   (1,456 )   1,456   (e)   -     -     -     -     (75 )   75   (e)   -  
Net income attributable to Artio Global Investors $ 6,413   $ 9,500   $ 15,913   $ 19,999   $ 3,801   $ 23,800   $ 21,150   $ 2,123   $ 23,273  
 
 

 

Net income per diluted share attributable to Artio Global Investors

$ 0.11 $ 0.27 $ 0.34 $ 0.40 $ 0.36 $ 0.39
 

Weighted average diluted shares used in net income per share attributable to Artio Global Investors

58,403,338 1,200,000 (d) 59,603,338 59,012,436 1,200,000 (d) 60,212,436 58,576,859 1,200,000 (d) 59,776,859
       

Exhibit - 4

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
(unaudited, in thousands, except share and per share amounts)
 
See Exhibit 5 for notes describing adjustments set forth below.
 
 
Nine Months Ended Sep. 30, 2011 Nine Months Ended Sep. 30, 2010
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
Revenues and other operating income:
Investment management fees $ 225,561 $ - $ 225,561 $ 249,301 $ - $ 249,301
Net gains (losses) on securities held for deferred compensation (1,435 ) - (1,435 ) 582 - 582
Foreign currency gains (losses)   (14 )   -     (14 )   13     -     13  
Total revenues and other operating income   224,112     -     224,112     249,896     -     249,896  
 
Expenses:
Employee compensation and benefits 82,217 (15,941 ) (a) 66,276 74,588 (8,366 ) (a) 66,222
Shareholder servicing and marketing 14,736 - 14,736 15,177 - 15,177
General and administrative   29,999     -     29,999     31,954     -     31,954  
Total expenses   126,952     (15,941 )   111,011     121,719     (8,366 )   113,353  
 
Operating income before income tax expense 97,160 15,941 113,101 128,177 8,366 136,543
 
Non-operating loss   (5,781 )   1,396  

(e)

  (4,385 )   (1,740 )   -     (1,740 )
Income before income tax expense 91,379 17,337 108,716 126,437 8,366 134,803
 
Income taxes   41,373     3,977   (b)   45,350     49,376     9,745   (b)   59,121  
Net income 50,006 13,360 63,366 77,061 (1,379 ) 75,682
 
Net income attributable to non-controlling interests in AGH 1,807 (1,807 ) (c) - 19,239 (19,239 ) (c) -
Net loss attributable to non-controlling interests in CIP   (1,396 )   1,396   (e)   -     -     -     -  
Net income attributable to Artio Global Investors $ 49,595   $ 13,771   $ 63,366   $ 57,822   $ 17,860   $ 75,682  
 

 

Net income per diluted share attributable to Artio Global Investors

$ 0.85 $ 1.06 $ 1.13 $ 1.26

 

Weighted average diluted shares used in net income per share attributable to Artio Global Investors

58,430,802 1,200,000 (d) 59,630,802 51,136,951 9,103,297 (d) 60,240,248

Exhibit - 5

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Notes to Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Income
 
 
Management believes the Non-GAAP adjustments set forth below provide more meaningful comparisons between periods. Additional information on the
reorganization of the Company's ownership structure and the relating non-recurring items are discussed in the Company's prospectus dated September 23, 2009.
 
(a) Adjustments to exclude the amortization expense associated with the RSUs awarded at the time of the IPO from all periods presented, as the granting of
the awards was one-time in nature.
 
The three and nine months ended Sep. 30, 2011 also exclude the Compensation Charge, as this was non-recurring.
 
(b) The adjustments to income taxes for all periods presented reflect the tax effect of the assumed full exchange of the Principals' non-controlling interests for
Class A common stock on the first day of the respective period, since prior to such exchange, income tax expense excludes the U.S. federal and state
taxes for the income attributable to the Principals and an adjustment to reflect the tax effects of excluding the amortization expense associated with the
RSUs awarded at the time of the IPO.
 
The three and nine months ended Sep. 30, 2011 also include an adjustment to reflect the tax effect of excluding the Compensation Charge.
 
(c) Adjustment to eliminate the Principals' non-controlling interests which are assumed to be exchanged for Class A common stock on the first day of the
respective period.
 
(d) Diluted shares outstanding assumes the Principals have fully exchanged their New Class A Units in Artio Global Holdings LLC for shares of the Company's
Class A common stock.
 
(e) Adjustments to eliminate third party investors' economic interests in the Consolidated Investment Products from both Net loss attributable to non-controlling
interests in the Consolidated Investment Products and Non-operating loss. Management believes these adjustments provide a more useful measure for
comparing Non-operating loss between periods.
           

Exhibit - 6

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES
Assets under Management by Investment Vehicle
(unaudited, in millions)
   
Three Months Ended % Change From Nine Months Ended % Change From

Sep. 30, 2011

Sep. 30, 2010

Jun. 30, 2011

Sep. 30, 2010

Jun. 30, 2011

Sep. 30, 2011

Sep. 30, 2010

Sep. 30, 2010

 
Proprietary Funds
Beginning assets under management $ 21,192 $ 21,030 $ 22,854 1 % (7 %) $ 23,013 $ 24,482 (6 %)
Gross client cash inflows 1,085 1,160 1,136 (6 %) (4 %) 4,009 4,838 (17 %)
Gross client cash outflows   (2,887 )   (2,045 )   (2,739 ) (41 %) (5 %)   (8,099 )   (6,884 ) (18 %)
Net client cash flows (1,802 ) (885 ) (1,603 ) (104 %) (12 %) (4,090 ) (2,046 ) (100 %)
Transfers between investment vehicles   (38 )   -     -   NM NM   (38 )   -   NM
Total client cash flows (1,840 ) (885 ) (1,603 ) (108 %) (15 %) (4,128 ) (2,046 ) (102 %)
Market appreciation (depreciation)   (3,888 )   2,620     (59 ) NM NM   (3,421 )   329   NM
Ending assets under management   15,464     22,765     21,192   (32 %) (27 %)   15,464     22,765   (32 %)
 
 
Institutional Commingled Funds
Beginning assets under management 8,285 7,842 9,374 6 % (12 %) 9,236 9,198 0 %
Gross client cash inflows 60 199 104 (70 %) (42 %) 317 667 (52 %)
Gross client cash outflows   (919 )   (302 )   (1,149 ) NM 20 %   (2,492 )   (1,098 ) (127 %)
Net client cash flows (859 ) (103 ) (1,045 ) NM 18 % (2,175 ) (431 ) NM
Transfers between investment vehicles   38     22     (22 ) 73 % NM   226     22   NM
Total client cash flows (821 ) (81 ) (1,067 ) NM 23 % (1,949 ) (409 ) NM
Market appreciation (depreciation)   (1,695 )   1,133     (22 ) NM NM   (1,518 )   105   NM
Ending assets under management   5,769     8,894     8,285   (35 %) (30 %)   5,769     8,894   (35 %)
 
 
Separate Accounts
Beginning assets under management 14,221 16,001 14,768 (11 %) (4 %) 16,801 17,854 (6 %)
Gross client cash inflows 111 308 31 (64 %) NM 277 1,411 (80 %)
Gross client cash outflows   (1,232 )   (688 )   (677 ) (79 %) (82 %)   (4,149 )   (2,161 ) (92 %)
Net client cash flows (1,121 ) (380 ) (646 ) (195 %) (74 %) (3,872 ) (750 ) NM
Transfers between investment vehicles   -     (22 )   22   100 % (100 %)   (188 )   (22 ) NM
Total client cash flows (1,121 ) (402 ) (624 ) (179 %) (80 %) (4,060 ) (772 ) NM
Market appreciation (depreciation)   (2,262 )   2,012     77   NM NM   (1,903 )   529   NM
Ending assets under management   10,838     17,611     14,221   (38 %) (24 %)   10,838     17,611   (38 %)
 
 
Sub-advisory Accounts
Beginning assets under management 3,137 4,122 4,332 (24 %) (28 %) 4,357 4,459 (2 %)
Gross client cash inflows 33 184 66 (82 %) (50 %) 250 877 (71 %)
Gross client cash outflows   (434 )   (236 )   (1,300 ) (84 %) 67 %   (2,054 )   (790 ) (160 %)
Net client cash flows (401 ) (52 ) (1,234 ) NM 68 % (1,804 ) 87 NM
Transfers between investment vehicles   -     -     -   NM NM   -     -   NM
Total client cash flows (401 ) (52 ) (1,234 ) NM 68 % (1,804 ) 87 NM
Market appreciation (depreciation)   (555 )   520     39   NM NM   (372 )   44   NM
Ending assets under management   2,181     4,590     3,137   (52 %) (30 %)   2,181     4,590   (52 %)
 
 
Total Assets under Management
Beginning assets under management 46,835 48,995 51,328 (4 %) (9 %) 53,407 55,993 (5 %)
Gross client cash inflows 1,289 1,851 1,337 (30 %) (4 %) 4,853 7,793 (38 %)
Gross client cash outflows   (5,472 )   (3,271 )   (5,865 ) (67 %) 7 %   (16,794 )   (10,933 ) (54 %)
Net client cash flows (4,183 ) (1,420 ) (4,528 ) (195 %) 8 % (11,941 ) (3,140 ) NM
Transfers between investment vehicles   -     -     -   NM NM   -     -   NM
Total client cash flows (4,183 ) (1,420 ) (4,528 ) (195 %) 8 % (11,941 ) (3,140 ) NM
Market appreciation (depreciation)   (8,400 )   6,285     35   NM NM   (7,214 )   1,007   NM
Ending assets under management $ 34,252   $ 53,860   $ 46,835   (36 %) (27 %) $ 34,252   $ 53,860   (36 %)
           

Exhibit - 7

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Assets under Management by Investment Strategy
(unaudited, in millions)
   
Three Months Ended % Change From Nine Months Ended % Change From
Sep. 30, 2011 Sep. 30, 2010 Jun. 30, 2011 Sep. 30, 2010 Jun. 30, 2011 Sep. 30, 2011 Sep. 30, 2010 Sep. 30, 2010
 
International Equity I
Beginning assets under management $ 15,768 $ 17,420 $ 17,298 (9 %) (9 %) $ 18,781 $ 21,656 (13 %)
Gross client cash inflows 186 416 182 (55 %) 2 % 800 1,068 (25 %)
Gross client cash outflows   (1,767 )   (1,204 )   (1,643 ) (47 %) (8 %)   (5,672 )   (3,676 ) (54 %)
Net client cash flows (1,581 ) (788 ) (1,461 ) (101 %) (8 %) (4,872 ) (2,608 ) (87 %)
Transfers between investment strategies   -     -     -   NM NM   -     -   NM
Total client cash flows (1,581 ) (788 ) (1,461 ) (101 %) (8 %) (4,872 ) (2,608 ) (87 %)
Market appreciation (depreciation)   (3,408 )   2,562     (69 ) NM NM   (3,130 )   146   NM
Ending assets under management   10,779     19,194     15,768   (44 %) (32 %)   10,779     19,194   (44 %)
 
International Equity II
Beginning assets under management 19,546 20,552 22,243 (5 %) (12 %) 23,272 24,716 (6 %)
Gross client cash inflows 361 554 384 (35 %) (6 %) 1,627 2,708 (40 %)
Gross client cash outflows   (2,507 )   (1,101 )   (3,053 ) (128 %) 18 %   (7,922 )   (4,577 ) (73 %)
Net client cash flows (2,146 ) (547 ) (2,669 ) NM 20 % (6,295 ) (1,869 ) NM
Transfers between investment strategies   (39 )   -     -   NM NM   (39 )   50   (178 %)
Total client cash flows (2,185 ) (547 ) (2,669 ) NM 18 % (6,334 ) (1,819 ) NM
Market appreciation (depreciation)   (4,316 )   2,994     (28 ) NM NM   (3,893 )   102   NM
Ending assets under management   13,045     22,999     19,546   (43 %) (33 %)   13,045     22,999   (43 %)
 
High Grade Fixed Income
Beginning assets under management 4,885 5,652 5,036 (14 %) (3 %) 5,088 5,293 (4 %)
Gross client cash inflows 305 157 229 94 % 33 % 682 779 (12 %)
Gross client cash outflows   (185 )   (521 )   (594 ) 64 % 69 %   (1,012 )   (1,077 ) 6 %
Net client cash flows 120 (364 ) (365 ) 133 % 133 % (330 ) (298 ) (11 %)
Transfers between investment strategies   1     -     104   NM (99 %)   100     10   NM
Total client cash flows 121 (364 ) (261 ) 133 % 146 % (230 ) (288 ) 20 %
Market appreciation (depreciation)   152     178     110   (15 %) 38 %   300     461   (35 %)
Ending assets under management   5,158     5,466     4,885   (6 %) 6 %   5,158     5,466   (6 %)
 
High Yield
Beginning assets under management 5,246 4,241 5,304 24 % (1 %) 4,907 3,516 40 %
Gross client cash inflows 409 628 502 (35 %) (19 %) 1,620 2,604 (38 %)
Gross client cash outflows   (962 )   (357 )   (499 ) (169 %) (93 %)   (2,030 )   (1,449 ) (40 %)
Net client cash flows (553 ) 271 3 NM NM (410 ) 1,155 (135 %)
Transfers between investment strategies   (1 )   -     (104 ) NM 99 %   (100 )   (10 ) NM
Total client cash flows (554 ) 271 (101 ) NM NM (510 ) 1,145 (145 %)
Market appreciation (depreciation)   (527 )   408     43   NM NM   (232 )   259   (190 %)
Ending assets under management   4,165     4,920     5,246   (15 %) (21 %)   4,165     4,920   (15 %)
 
Global Equity
Beginning assets under management 1,037 817 1,066 27 % (3 %) 1,025 618 66 %
Gross client cash inflows 14 76 8 (82 %) 75 % 41 454 (91 %)
Gross client cash outflows   (16 )   (17 )   (20 ) 6 % 20 %   (50 )   (64 ) 22 %
Net client cash flows (2 ) 59 (12 ) (103 %) 83 % (9 ) 390 (102 %)
Transfers between investment strategies   39     -     -   NM NM   39     (50 ) 178 %
Total client cash flows 37 59 (12 ) (37 %) NM 30 340 (91 %)
Market appreciation (depreciation)   (220 )   115     (17 ) NM NM   (201 )   33   NM
Ending assets under management   854     991     1,037   (14 %) (18 %)   854     991   (14 %)
           

Exhibit - 7

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Assets under Management by Investment Strategy
(unaudited, in millions)
   
Three Months Ended % Change From Nine Months Ended % Change From
Sep. 30, 2011 Sep. 30, 2010 Jun. 30, 2011 Sep. 30, 2010 Jun. 30, 2011 Sep. 30, 2011 Sep. 30, 2010 Sep. 30, 2010
 
US Equity
Beginning assets under management 235 222 274 6 % (14 %) 227 81 180 %
Gross client cash inflows 12 20 23 (40 %) (48 %) 71 180 (61 %)
Gross client cash outflows (21 ) (66 ) (56 ) 68 % 63 % (88 ) (77 ) (14 %)
Net client cash flows (9 ) (46 ) (33 ) 80 % 73 % (17 ) 103 (117 %)
Transfers between investment strategies -   -   -   NM NM -   -   NM
Total client cash flows (9 ) (46 ) (33 ) 80 % 73 % (17 ) 103 (117 %)
Market appreciation (depreciation) (57 ) 14   (6 ) NM NM (41 ) 6   NM
Ending assets under management 169   190   235   (11 %) (28 %) 169   190   (11 %)
 
Other(1)
Beginning assets under management 118 91 107 30 % 10 % 107 113 (5 %)
Gross client cash inflows 2 - 9 NM (78 %) 12 - NM
Gross client cash outflows (14 ) (5 ) -   (180 %) NM (20 ) (13 ) (54 %)
Net client cash flows (12 ) (5 ) 9 (140 %) NM (8 ) (13 ) 38 %
Transfers between investment strategies -   -   -   NM NM -   -   NM
Total client cash flows (12 ) (5 ) 9 (140 %) NM (8 ) (13 ) 38 %
Market appreciation (depreciation) (24 ) 14   2   NM NM (17 ) -   NM
Ending assets under management 82   100   118   (18 %) (31 %) 82   100   (18 %)
 
Total Assets under Management
Beginning assets under management 46,835 48,995 51,328 (4 %) (9 %) 53,407 55,993 (5 %)
Gross client cash inflows 1,289 1,851 1,337 (30 %) (4 %) 4,853 7,793 (38 %)
Gross client cash outflows (5,472 ) (3,271 ) (5,865 ) (67 %) 7 % (16,794 ) (10,933 ) (54 %)
Net client cash flows (4,183 ) (1,420 ) (4,528 ) (195 %) 8 % (11,941 ) (3,140 ) NM
Transfers between investment strategies -   -   -   NM NM -   -   NM
Total client cash flows (4,183 ) (1,420 ) (4,528 ) (195 %) 8 % (11,941 ) (3,140 ) NM
Market appreciation (depreciation) (8,400 ) 6,285   35   NM NM (7,214 ) 1,007   NM
Ending assets under management 34,252   53,860   46,835   (36 %) (27 %) 34,252   53,860   (36 %)
 
1. Other includes the Local Emerging Markets Debt Fund, Global Credit Opportunities Fund, Other International Equity and Other strategies.
                     

Exhibit - 8

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Mutual Fund Performance Data (1)
     
 
Morningstar Ratings /
Funds in Total Universe (# of Funds) Lipper Percentile Rankings (PR) / Funds in Total Universe (# of Funds)
YTD 1-Year 3-Year 5-Year 10-Year
# of # of # of # of # of # of
Fund (3)   Rating Funds Category PR Funds PR Funds PR Funds PR Funds PR Funds Classification
 
Artio International Equity Fund, Class A (2) 3 893 Foreign Large Blend 100 358 100 347 92 303 78 256 12 152 International Large-Cap Core
Artio International Equity Fund, Class I (2) 3 893 Foreign Large Blend 100 358 100 347 92 303 74 256 8 152 International Large-Cap Core
 
Artio International Equity II Fund, Class A 3 893 Foreign Large Blend 100 358 100 347 89 303 59 256 NA NA International Large-Cap Core
Artio International Equity II Fund, Class I 3 893 Foreign Large Blend 99 358 99 347 87 303 54 256 NA NA International Large-Cap Core
 
Artio Global Equity Fund, Class A 3 978 World Stock 100 118 100 111 60 100 64 74 NA NA Global Large-Cap Growth
Artio Global Equity Fund, Class I 3 978 World Stock 99 118 97 111 57 100 63 74 NA NA Global Large-Cap Growth
 
Artio Microcap Fund, Class A 2 784 Small Growth 81 739 11 723 16 655 42 529 NA NA Small-Cap Core
Artio Microcap Fund, Class I 2 784 Small Growth 80 739 10 723 14 655 38 529 NA NA Small-Cap Core
 
Artio Smallcap Fund, Class A 3 784 Small Growth 90 739 80 723 23 655 17 529 NA NA Small-Cap Core
Artio Smallcap Fund, Class I 3 784 Small Growth 89 739 77 723 19 655 14 529 NA NA Small-Cap Core
 
Artio Midcap Fund, Class A 3 784 Mid-Cap Growth 9 312 4 305 13 270 36 224 NA NA Mid-Cap Core
Artio Midcap Fund, Class I 3 784 Mid-Cap Growth 8 312 3 305 13 270 30 224 NA NA Mid-Cap Core
 
Artio Multicap Fund, Class A 2 1,727 Large Growth 54 793 27 790 14 687 23 577 NA NA Multi-Cap Core
Artio Multicap Fund, Class I 3 1,727 Large Growth 48 793 23 790 11 687 16 577 NA NA Multi-Cap Core
 
Artio Global High Income Fund, Class A 4 602 High Yield Bond 86 494 95 491 50 424 16 349 NA NA High Current Yield
Artio Global High Income Fund, Class I 4 602 High Yield Bond 85 494 93 491 44 424 10 349 NA NA High Current Yield
 
Artio Total Return Bond Fund, Class A 4 1,241 Intermediate Term Bond 11 578 7 574 45 490 21 390 4 275 Intermediate Investment Grade Debt
Artio Total Return Bond Fund, Class I 5 1,241 Intermediate Term Bond 8 578 5 574 37 490 16 390 2 275 Intermediate Investment Grade Debt
 
 
Note: Data as of September 30, 2011
 
NA: Not applicable
 
1. Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds and fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period.
 

For each mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating? based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. A fund's independent Morningstar Rating metric is then compared against the mutual fund universe breakpoint to determine its hypothetical rating.  Data presented reflect past performance, which is no guarantee of future results. © 2011 Morningstar, Inc. All Rights Reserved.  This news release is not, and should not be considered, sales material and is not an offer or a solicitation for any securities.

 
2. Closed to new investors.
 
3. The Artio Local Emerging Markets Debt Fund was launched in May 2011 and is not yet ranked or rated in any of the above categories.

Artio Global Investors Inc.
Investor Relations:
Peter Sands, 212-297-3891
Head of Investor Relations
ir@artioglobal.com
or
Media Relations:
Neil Shapiro, 212-754-5423
Intermarket Communications
nshapiro@Intermarket.com


© Business Wire 2011
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