Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q1 2022 Earnings Presentation
49 slides from Alliancebernstein Holding L.p's earnings presentation, Apr 29, 2022
Slide 1: First Quarter 2022 Review
First Quarter 2022 Review April 29, 2022 Seth P. Bernstein, President & Chief Executive Officer Kate Burke, Chief Operating Officer & Head of Private Wealth Bill Siemers, Interim Chief Financial Officer, Controller & Chief Accounting Officer
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements Certain statements provided by management in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other fact
Slide 3: Seth P. Bernstein, President & Chief Executive Officer
Seth P. Bernstein President & Chief Executive Officer First Quarter 2022 Review 3
Slide 4: Firmwide Overview: First Quarter 2022
Firmwide Overview: First Quarter 2022 1Q:22 vs. 1Q:21 1Q:22 vs. 4Q:21 $40.9 $40.9 $39.4 $33.3 Gross Sales 1Q:22* 1Q:21 1Q:22* 4Q:21 $12.2 $12.2 $6.5 $6.4 Active Net Flows 1Q:22* 1Q:21 1Q:22* 4Q:21 $735.4 $697.2 $735.4 $778.6 End of Period AUM 1Q:22 1Q:21 1Q:22 4Q:21 $751.2 $751.2 $761.1 $688.5 Avera
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend Firmwide 45.0 Retail 27.6 40.9 23.0 23.8 25.6 20.6 36.3 ex- 39.4 33.3 32.3 Venerable 7.2 11.4 6.6 6.3 5.2 7.5 7.4 5.2 2.7 6.2 (1.0) (10.0) (25.1) † (28.1) (32.0) (29.5) (1.3) (38.8) (20.3) (18.6) (19.0) (21.3) (21.6) 1Q:21 2Q:21* 3Q:21 4Q:21 1Q:22
Slide 6: Percentage of Assets Outperforming at Quarter-End
Percentage of Assets Outperforming at Quarter-End Fixed Income One-Year Three-Year Five-Year 91 91 92 89 69 70 72 72 65 68 70 70 71 64 55 1Q:21 2Q:21 3Q:21 4Q:21 1Q:22 1Q:21 2Q:21 3Q:21 4Q:21 1Q:22 1Q:21 2Q:21 3Q:21 4Q:21 1Q:22 Equities One-Year Three-Year Five-Year 76 73 78 71 75 66 67 70 57 58 44
Slide 7: Retail Highlights
Retail Highlights FI Outflows Offset Strength in Active Equities First Quarter 2022 Highlights First quarter of slight outflows since 2020 Sales exceed $20B for 5th consecutive quarter 40 30 • Gross sales of $20.6B; -$2B or -10% Y/Y, and -$7B or -25% vs. record 4Q 20 7.4 • Redemption rate improved t
Slide 8: Institutional Highlights
Institutional Highlights Organic Growth in 11/12 Trailing Quarters First Quarter 2022 Highlights (USD billions) Sales and Flows 20 • Gross sales of $14.3B, up 191% Y/Y, due to $9.6B custom target-date 10.2 mandate 10 1.4 0.4 5.0 • Moderate redemptions of $4.1B; low 4.8% annualized redemption rate 2.
Slide 9: Private Wealth Highlights
Private Wealth Highlights Accelerating 7% Annualized Organic Growth in 1Q First Quarter 2022 Highlights Positive 6 of last 7 quarters Strong Sales and Advisor Productivity Drive Accelerating Net Inflows (USD billions) • 1Q gross sales of $6.0B, +12% Y/Y, +15% Q/Q 5 • Advisor productivity: +15% Y/Y,
Slide 10: Bernstein Research Highlights
Bernstein Research Highlights Bernstein Research Quarterly Revenues First Quarter 2022 Highlights (USD millions) Higher Revenues in US and Europe offset by Continued Caution in Asia 119 114 118 • 1Q Revenues of $118M, -1% Y/Y, +3% Q/Q • Volatile markets support trading volumes and mix of high-touch
Slide 11: Progress on Our Initiatives in 1Q22
Progress on Our Initiatives in 1Q22 Firmwide Initiative Progress Deliver superior • Fixed Income: 72% of assets in outperforming services for 3-yr period; 64% for 1-yr and 71% for 5-yr investment • Active Equity: 38% of assets in outperforming services for 3-yr period; 45% for 1-yr and 58% for 5-yr
Slide 12: Kate Burke, Chief Operating Officer, Head of Private Wealth
Kate Burke Chief Operating Officer, Head of Private Wealth First Quarter 2022 Review 12
Slide 13: U.S. Private Wealth is a Large Market with Significant Growth Potential
U.S. Private Wealth is a Large Market with Significant Growth Potential AB operates in two of the fastest growing and largest industry channels US Private Wealth Industry Assets by Channel Projected AUM AUM growth AUM growth $38 Trillion CAGR, 15-20 CAGR, 22-27 Wirehouse Broker 23% 8% 3% National/Re
Slide 14: We Have Invested Time and Capital Consistently to Build the Foundation
We Have Invested Time and Capital Consistently to Build the Foundation… …of a scalable wealth management platform that is in its early stages of growth acceleration PW Sales & Flows as % of AUM (2016 – 1Q22) Gross Sales Redemptions Net Flows 20.5% 19.8% 17.4% 18.0% 14.2% 14.7% 14.1% 14.2% 13.2% 12.7
Slide 15: Our Strategy Will Accelerate Growth
Our Strategy Will Accelerate Growth We aspire to double revenues in 8 years by strengthening existing business and accelerating growth Footprint Increase number of advisors and new Expansion Reshape our offerings (service, cities/offices strategies, value added deliverables) Enhanced to compete in t
Slide 16: AB's Integrated+ Model is Uniquely Positioned to Grow Market Share
Footprint Expansion AB’s Integrated+ Model is Uniquely Positioned to Grow Market Share... ...through our tax- and fee-efficient approach that avoids overlapping portfolios • >$115B in AUM represents ~1% share of AB Private Wealth US Footprint Private Bank/RIA channels New York Minneapolis • Operatin
Slide 17: Footprint Expansion: Thoughtful and Deliberate Approach
Footprint Expansion Footprint Expansion: Thoughtful and Deliberate Approach Continue to grow our presence in markets with substantial and growing pools of wealth • Platform Expansion: Accelerate advisor headcount growth rates well above historical rates, with additional support capacity and infrastr
Slide 18: Strength of Private Wealth Platform Drives Industry Leading Productivity
Footprint Expansion Strength of Private Wealth Platform Drives Industry Leading Productivity AB leading in Ultra High Net Worth client groups, AUM per advisor Assets per Advisor (PW Assets/Advisor Headcount) $ in millions, as of Year-End 2020 & 2021 $509 $479 $296 $249 $204 YE-20 $188 $177 $167 $157
Slide 19: Enhanced Investment Advice: Relentless Focus on Client Demand
Enhanced Investment Advice Enhanced Investment Advice: Relentless Focus on Client Demand Our evolving investment platform reflects clients’ increasing sophistication and complexity The Historic Approach Continued Enhancement Modifications to Existing Portfolios 2007 Today 2024 Risk Mgmt Risk Mgmt St
Slide 20: We Have Accelerated Launches of Innovative, Demand-Driven Strategies
Enhanced Investment Advice We Have Accelerated Launches of Innovative, Demand-Driven Strategies Focused on private alternatives, ESG and differentiated active strategies PW Strategy Launches Since 2018 Over half of PW’s recent offerings were Private Alternatives Q1 2019 Q2 Single State Muni SMA Priv
Slide 21: Segmented Client Strategy: Ultra High-Net-Worth
Segmented Client Strategy Segmented Client Strategy: Ultra High-Net-Worth We continue to grow share in the UHNW segment • Expand existing service offerings within family engagement, complex and sophisticated wealth planning and our investment platform • Build a comprehensive suite of services for ou
Slide 22: Leveraging Technology to Increase Efficiency and Enable Growth
Align & Invest in Infrastructure Leveraging Technology to Increase Efficiency and Enable Growth Technology People • Design: Refreshed online presence improves lead • Creating Capacity: Leverage our technology generation. through centralization and automation, freeing up human capital • Digitization
Slide 23: Our Unique Value Proposition: A Holistic Wraparound Model
Enhanced Advice Our Unique Value Proposition: A Holistic Wraparound Model We advise clients on planning for, and living with, the complexities that come with wealth FINANCIAL ELEMENTS LIFESTYLE AND LEGACY ELEMENTS Tailored Investment Customized Solutions Insights Investing Aligned Asset Purpose Life
Slide 24: Private Wealth is a Strategic Asset to AllianceBernstein
Strategic Asset Private Wealth is a Strategic Asset to AllianceBernstein Secularly growing, high-multiple, recurring fee business representing 1/3 of AB’s adjusted base fees PW 34% of AB's Adjusted Fee Base Pure-Play Wealth Managers Trade at a Premium, Reflecting Secular Growth, Recurring-Fee Model
Slide 25: Bill Siemers, Interim Chief Financial Officer
Bill Siemers Interim Chief Financial Officer, Controller & Chief Accounting Officer First Quarter 2022 Review 25
Slide 26: First Quarter 2022 GAAP Income Statement
First Quarter 2022 GAAP Income Statement Income Statement (in US $ Millions) 1Q22 1Q21 %∆ 4Q21 %∆ Base Fees $748 $687 9% $780 (4)% Performance Fees 76 16 n/m 157 (52)% Bernstein Research Services 118 119 (1)% 114 3% Distribution Revenues 168 147 14 % 178 (6)% Dividends & Interest 11 9 32 % 13 (9)% I
Slide 27: Adjusted Financial Highlights: First Quarter 2022
Adjusted Financial Highlights: First Quarter 2022 1Q:22 vs. 1Q:21 1Q:22 vs. 4Q:21 $904 $820 $904 $1,024 Adjusted Revenues 1Q:22 1Q:21 1Q:22 4Q:21 $394 $285 $260 $285 Adjusted Operating Income 1Q:22 1Q:21 1Q:22 4Q:21 31.5% 31.7% 31.5% 38.5% Adjusted Operating Margin 1Q:22 1Q:21 1Q:22 4Q:21 $1.29 $0.9
Slide 28: First Quarter 2022 Adjusted Income Statement
First Quarter 2022 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 1Q22 1Q21 %∆ 4Q21 %∆ Base Fees(1) $725 $661 10 % $753 (4)% Performance Fees 45 16 185 % 134 (66)% Bernstein Research Services 118 119 (1)% 114 3% Investment (Losses) Gains (6) 2 n/m (1) n/m Other Revenues 25 23
Slide 29: First Quarter 2022 Adjusted Income Statement Highlights
First Quarter 2022 Adjusted Income Statement Highlights Revenues • Base Fees increased 10% versus 1Q21 driven by a 9% increase in average AUM, higher across all channels, while the fee rate increased 1%. Base Fees decreased 4% versus 4Q21 driven by a decrease in average AUM, lower across all three d
Slide 30: 1Q22 in Review: AB's 5-part Strategy Statement
1Q22 in Review: AB’s 5-part Strategy Statement • 69% of US and 63% of Lux assets rated 4/5-stars by Morningstar at quarter-end Deliver • Annualized Organic Growth of 6%, led by Institutional, PW • Active Equities 6% AOG, Munis 7% AOG offsets Taxable FI outflows 1Q diversifying net inflows: • Equity:
Slide 31: Appendix
Appendix First Quarter 2022 Review 31
Slide 32: Retail Mutual Funds Relative Performance vs. Morningstar Averages
Retail Mutual Funds Relative Performance vs. Morningstar Averages 1 Year 3 Year 5 Year 10 Year Relative Relative Relative Relative Retail Service (%) Percentile (%) Percentile (%) Percentile (%) Percentile Equity Large Cap Growth 5.7 31 1.8 30 2.3 21 2.6 7 Concentrated Growth 2.2 48 (0.9) 63 (0.2) 5
Slide 33: Retail Mutual Funds Relative Performance vs. Morningstar Averages
Retail Mutual Funds Relative Performance vs. Morningstar Averages 1 Year 3 Year 5 Year 10 Year Relative Relative Relative Relative Service (%) Percentile (%) Percentile (%) Percentile (%) Percentile Fixed Income American Income — 62 (0.1) 58 0.2 47 0.6 13 European Income (1.2) 67 0.4 32 0.9 20 1.5 1
Slide 34: Institutional Composite Relative Performance vs. Benchmarks
Institutional Composite Relative Performance vs. Benchmarks Service 1 Year 3 Year 5 Year 10 Year Equity US Small Cap Growth (0.7) 5.4 8.0 3.6 Concentrated Global Growth (10.2) (0.3) 2.6 1.5 Global Core (4.3) (1.9) 0.3 1.2 International Strategic Core 4.0 (0.9) 1.0 2.3 Sustainable Global Thematic (4.
Slide 35: Assets Under Management: 1Q22
Assets Under Management: 1Q22 (US $ Billions) March 31, 2022 December 31, 2021 Institutions Private Wealth Retail Total Total Equity Actively Managed $ 68 $ 55 $ 142 $ 265 $ 288 Passive (1) 27 2 37 66 71 Total Equity 95 57 179 331 359 Fixed Income Taxable 145 15 66 226 247 Tax-Exempt 1 26 28 55 57 P
Slide 36: Three Months Ended 3/31/22: AUM Roll-Forward by Distribution Channel
Three Months Ended 3/31/22: AUM Roll-Forward by Distribution Channel In US $ Billions Beginning Sales/New Redemptions/ Net Cash Net Investment Net End Investment Service: of Period Accounts Terminations Flows Flows Performance Change of Period Institutions US $ 165.4 $1.5 $(0.5) $(0.6) $0.4 $(11.7)
Slide 37: Three Months Ended 3/31/22: AUM Roll-Forward by Investment Service
Three Months Ended 3/31/22: AUM Roll-Forward by Investment Service In US $ Billions Beginning Sales/New Redemptions/ Net Cash Net Investment Net End Investment Service: of Period Accounts Terminations Flows Flows Performance Change of Period Equity Active US $ 173.7 $ 12.2 $ (6.5) $ (1.0) $ 4.7 $ (1
Slide 38: Three Months Ended 3/31/22: Active vs. Passive Net Flows
Three Months Ended 3/31/22: Active vs. Passive Net Flows Actively Passively Managed Managed (1) Total Equity $ 4.6 $ (1.8) $ 2.8 Fixed Income (3.7) 0.4 (3.3) Alternatives/MAS (2) 11.3 0.6 11.9 Total $ 12.2 $ (0.8) $ 11.4 (1) Includes index and enhanced index services. (2) Includes certain multi-asse
Slide 39: Assets Under Management By Region
Assets Under Management By Region Institutional Geographic Breakdown Retail Geographic Breakdown Other NA ex US 3% 5% Japan UK 6% 4% EMEA 11% APAC ex Japan 6% Japan 12% EMEA 9% US US 70% 56% APAC ex Japan 18% $325.9B $292.6B As of March 31, 2022 By Client Domicile Percentages may not add up to 100%
Slide 40: First Quarter 2022 Adjusted Advisory Fees
First Quarter 2022 Adjusted Advisory Fees 1Q22 1Q21 %∆ 4Q21 %∆ Ending AUM ($ Billions) $ 735 $ 697 5%$ 779 (6)% Average AUM ($ Billions) $ 751 $ 689 9%$ 761 (1)% By Fee Type ($ Millions): Adjusted Base Fees(1) $ 725 $ 661 10 % $ 753 (4)% Adjusted Performance Fees 45 16 185 % 134 (66)% Total $ 770 $
Slide 41: First Quarter 2022 GAAP Income Statement
First Quarter 2022 GAAP Income Statement In US $ Millions (except EPU) 1Q22 1Q21 %∆ 4Q21 %∆ Net Revenues $ 1,105 $ 1,007 10 % $ 1,265 (13)% Operating Expenses 857 747 15 % 872 (2)% Operating Income 248 260 (5)% 393 (37)% Net Income Attributable to AB Unitholders 261 244 7% 372 (30)% AB Holding GAAP
Slide 42: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets 3/31/2022 12/31/2021 Cash and cash equivalents $ 1,113 $ 1,286 Cash and securities, segregated 1,693 1,504 Receivables, net 2,796 2,651 Investments: Long-term incentive compensation-related 52 64 Other 191 209 Assets of consolidated variable interes
Slide 43: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Three Months Ended 3/31/2022 3/31/2021 Net Income $ 236 $ 244 Non-cash items: Amortization of deferred sales commissions 9 8 Non-cash long-term incentive compensation expense 19 18 Depreciation and other amortization 11 11 Unrealized losses on in
Slide 44: First Quarter 2022 AB Holding Financial Results
First Quarter 2022 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 1Q22 1Q21 %∆ 4Q21 %∆ AB Net Income Attributable to AllianceBernstein $ 261 $ 244 7%$ 372 (30)% Weighted Average Equity Ownership Interest 36.2 % 36.4 % 36.0 % AB Holding Equity in Net Income Attributable to
Slide 45: First Quarter 2022 GAAP to Non-GAAP Reconciliation
First Quarter 2022 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related GAAP Payments Adjustments Inv. VIE (Charges) Expenses Non-GAAP (A) (B) (C) (D) (E) (F) Investment advisory and servic
Slide 46: First Quarter 2021 GAAP to Non-GAAP Reconciliation
First Quarter 2021 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related GAAP Payments Adjustments Inv. VIE (Charges) Expenses Non-GAAP (A) (B) (C) (D) (E) (F) Investment advisory and servic
Slide 47: Fourth Quarter 2021 GAAP to Non-GAAP Reconciliation
Fourth Quarter 2021 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related GAAP Payments Adjustments Inv. VIE (Charges) Expenses Other Non-GAAP (A) (B) (C) (D) (E) (F) (G) Investment advisory
Slide 48: AB Adjusted Financial Results Reconciliation
AB Adjusted Financial Results Reconciliation Notes to Consolidated Statements of Income and Supplemental Information (Unaudited) A. We exclude all of the company’s distribution revenues, which are recorded as a separate line item on the consolidated statement of income, as well as a portion of inves
Slide 49: AllianceBernstein
ALLIANCEBERNSTEIN'
AllianceBernstein Holding L.P. Units — Q1 2022 Earnings Presentation on 6ix