Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Artio Global Investors Inc. (1419178) 10-Q published on May 06, 2013 at 4:37 pm
Reporting Period: Mar 30, 2013
The MSCI All Country World ex-USA Index (the “IE Index”) increased 3.2% for the three months ended March 31, 2013 and the gross performance of our International Equity I strategy outperformed the IE Index by 1.5% and our International Equity II strategy outperformed the IE Index by 1.7%. For the the three months ended March 31, 2013, on a geographic basis, exposure to emerging markets had a positive impact. Positioning in developed markets also proved beneficial, partially offset by stock selection developed markets. During the three months ended March 31, 2012, the gross performance of our International Equity I strategy outperformed the IE Index by 0.7% and our International Equity II strategy outperformed the IE Index by 0.3%.
Our commingled funds have seen significant net client cash outflows. These funds carry receivables for tax reclaims, which are recoverable over periods of time that extend beyond one year. If the commingled funds were to be liquidated, we might provide the liquidity to the funds for all or a portion of these receivables, which could range from $13 million to $15 million.
Net cash used by operating activities increased $1.1 million for the three months ended March 31, 2013, compared to the corresponding period in 2012, primarily reflecting a decrease in our AuM, which is the primary driver of income, and proceeds from debt of the Consolidated Investment Products in 2012 compared to none in 2013, partially offset by lower cash bonuses paid in 2013 compared to 2012 and lower investment purchases by the Consolidated Investment Products. Since we pay bonuses in the first quarter of the year, it is typically the period of our highest use of cash.
Beginning on or about February 21, 2013, five putative shareholder class action complaints (the “Class Action Complaints”) were filed against the Company's Board of Directors, the Company, Aberdeen Asset Management PLC (“Aberdeen”), a public limited company organized under the laws of the United Kingdom, and Guardian Acquisition Corporation (“Merger Subsidiary”), a Delaware corporation, challenging the proposed transaction. Three of the Class Action Complaints were filed in the Delaware Court of Chancery (the “Delaware Actions”): Velvart v. Artio Global Investors, Inc., et al., Case No. 8347-VCL, Waldner v. Artio Global Investors Inc., et al., No. 8376 and Hunt v. Williams, et al., No. 8389. Two of the Class Action Complaints were filed in the Supreme Court of New York, New York County (the “New York Actions”): Fernicola v. Artio Global Investors Inc., et al., No. 650625/2013 and Dart Seasonal Products Retirement Plan v. Robert Jackson, et al., No. 650713/2013.
On April 10, 2013, the parties to the New York Actions (including the plaintiffs in the previously filed Delaware Actions) reached an agreement in principle providing for the settlement of the New York Actions on the terms and conditions set forth in a memorandum of understanding (the “MOU”). Pursuant to the MOU, the Company included certain supplemental disclosures in its definitive proxy statement filed April 11, 2013, in exchange for dismissal of the New York Actions on the merits and a customary release of defendants. The proposed settlement is conditioned on, among other things, consummation of the proposed transaction, completion of certain confirmatory discovery, class certification, and final approval by the Supreme Court of New York, New York County following notice to the Company's shareholders. The proposed settlement does not affect the form or amount of consideration to be paid in the Merger. (All references to “Merger” refer to the merger of Merger Subsidiary with and into Artio Global with Artio Global surviving as an indirect wholly owned subsidiary of Aberdeen.)
The Company notes that the ultimate outcome of the litigation is uncertain and unknown, and that any relief delaying or enjoining the proposed transaction could have adverse consequences to the Company.