Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Bank of America Merrill Lynch 2012 Banking and Financial Services Conference
29 slides from Alliancebernstein Holding L.p's conference presentation, Nov 14, 2012
Slide 1: AllianceBernstein Asset Allocation: Critical to Our Long-Term Growth
November 13, 2012 AllianceBernstein Asset Allocation: Critical to Our Long-Term Growth Bank of America Merrill Lynch 2012 Banking and Financial Services Conference Peter S. Kraus Chairman & Chief Executive Officer Seth J. Masters Chief Investment Officer — Asset Allocation ALLIANCEBERNSTEIN
Slide 2: Peter S. Kraus, Chairman & Chief Executive Officer
AllianceBernstein.com 1 Peter S. Kraus Chairman & Chief Executive Officer
Slide 3: 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 fac
Slide 4: State of the Firm: 2008
State of the Firm: 2008 lm Steep performance decline and severe asset losses in Institutional Large Cap Equities = Decline exacerbated by overconcentration in two strategies: Global Value and Global Growth m= Languishing Retail business suffering from years of dis-investment @ Lack of product innova
Slide 5: Our Long-Term Growth Strategy
Our Long-Term Growth Strategy
Slide 6: Four Years of Successful Execution: A Snapshot
Four Years of Successful Execution: A Snapshot Firmwide Initiative Progress Ongoing outperformance and global recognition in Fixed Income 89% of assets in services outperforming for 3-yr period through September 2012 2012 Retail and Institutional performance awards in U.S., Europe and Asia Evolving
Slide 7: AllianceBernstein Today: The Evolution of Our Business
AllianceBernstein Today: The Evolution of Our Business Dec 08: $221B Assets Under Management* Sept 12: $356B 49% of Firm Total (Sin Billions) 85% of Firm Total Fixed Equities ex- Equities ex- Income Eau (eed ge Con Asset Asset ™~ ‘Allosetn ». Allocation Large Cap $5 Alternatives Large Cap $11 Altern
Slide 8: Unique Success with Asset Allocation Strategies
Unique Success with Asset Allocation Strategies Greatest AUM % Growth of Our Targeted Product Areas Growth in AUM and Revenues % Growth, 4Q08 - 3012 AUM Growth $498 159 122 1 a $198 51 47 Asset Alternatives Fixed Equities 408 3012 Allocation Income —_ex-Large Cap* ‘includes SmallMid/SMID Cap, Emergi
Slide 9: Seth J. Masters, Chief Investment Officer - Asset Allocation
AllianceBernstein.com 8 Seth J. Masters Chief Investment Officer - Asset Allocation
Slide 10: Investors Seek Solutions to Their Primary Financial Concerns
Investors Seek Solutions to Their Primary Financial Concerns Defined Benefit Pension Plans Asset-liability matching Individuals Meeting financial goals Defined Contribution Endowments and Plans Foundations Proper target-date Determining allocation spending policy Sovereign Wealth Funds Devising a sa
Slide 11: AllianceBernstein Asset Allocation Services Line-Up
AllianceBernstein Asset Allocation Services Line-Up Private Dynamic Asset Inflation / nt location Real Assets = Integrated = Dynamic Risk Glide Path = Efficient Inflation Custom Indexes Management = Dynamic Return Design Protection ‘Smart Trading Value Add: ™ Tax Aware Customized m Active = Risk Mit
Slide 12: Our Bernstein Fully Diversified Investment Solution
Our Bernstein Fully Diversified Investment Solution 2012: A multi-style, all-cap portfolio —» that seeks reliable premiums in broad range of markets US Strategic Equities | , Non-US Stocks 2010: Dynamic Asset Allocation adjusts market exposures due to <— changing risk conditions 2011: Appropriate fo
Slide 13: Increasing Availability of Alternatives with RIC
Increasing Availability of Alternatives with RIC Benefits of a Registered Investment Company Diversified by Strategy Across Different Managers = Diversified exposure to multiple hedge funds and Emerging Markets strategies (iunds) Global Macro ™ Consistency in our advice across our client base (2 fun
Slide 14: Strategic Equities: Harnessing More Best Ideas
Strategic Equities: Harnessing More Best Ideas # of Stocks Portfolio Construction Risk Management Tax Management Target Client Stand-Alone Services Strategic Equities: Multi Cap and Multi Style e@e0 Strategic Strategic | SMID Value Growth | Value Active Low Select SMID Volatility Equity Growth 200 —
Slide 15: US Strategic Equities Is a High-Conviction Portfolio
US Strategic Equities Is a High-Conviction Portfolio ® The portfolio is concentrated in our = Top 10 holdings have research highest conviction ideas support from different teams Weight of Top 30 Holdings* Strategic Equities: Top 30 Holdings* Apple ioks} Time Warner Cable @ © Pfizer © © * Emerson Ele
Slide 16: DAA Seeks to Provide More Consistent Returns
DAA Seeks to Provide More Consistent Returns Dynamic Asset Allocation Frequency Dynamic Asset Allocation seeks to = Reduce short-term risk = Mitigate extreme outcomes ® Maintain similar long-term returns The Desired Experience Low Returns High 18
Slide 17: DAA At Work: Responding to Changing Market Environments
Dynamic Asset DAA At Work: Responding to Changing Market Environments gilscation mmm Adjustments to 60/40 Weight” Global Stock Index (right) 20 3Q11: EU 120 debt crisis 2012: 3Q10: EU and spreads to Renewed: IMF agree to Italy and 5 Steck. 4Q11: US uncertainty Greek loan Spain ty. package growth bet
Slide 18: Impact of Volatility Management Through DAA
Impact of Volatility Management Through DAA Dynamic Asset Allocation Frequency Impact of Volatility Management Since Inception* ® Volatility Reduction: 11% m Return Impact: -0.2% Performance Benefit Q2 2010: 120 bps Q3 2011: 218 bps | The Desired Experience Performance Cost Q3 2010: -113 bps Q4 2011
Slide 19: Sizing the DC Market Opportunity
Sizing the DC Market Opportunity m™ The Pension Protection Act of 2006 (PPA) provides ™ The US DC asset growth opportunity is with DC Plan sponsors incentives* to auto- enroll QDIAs, expected to total $3.4T by 2020 — which is workers, and legal protections™* for the Qualified larger than the entire
Slide 20: Customized Retirement Strategies: Default Option Built to Last
19 Customized Retirement Strategies: Default Option Built to Last Defined Contribution Operational platform that seamlessly supports customization and evolving needs Dedicated custom target-date specialists - responsible for implementation and all daily activities Glide path, fund management and ret
Slide 21: Steady Growth in the US and UK DC Space
AllianceBernstein.com Steady Growth in the US and UK DC Space 20 Defined Contribution Steady Growth in CRS Penetrating the US and UK DC Space $B ■ Total Defined Contribution AUM of $26B ■ US DC: ■ Long-standing blue chip clients in the pharmaceutical, technology and consumer sectors ■ Introduced fir
Slide 22: Real Assets: Long-Term Trends Support Real Asset Exposure
Real Assets | Inflation / -Term Trends Support Real Asset Exposure Developed World Deleveraging Emerging World Urbanization Accommodative Liquidity Excess Money Monetary Policy and Credit Growth Economic Stagflationary Currency — Accommodative Inflationary Overheating Headwinds Pressures Weakness Fi
Slide 23: Some Assets Benefit from Inflationary Pressures
Inflation / Some Assets Benefit from Inflationary Pressures Real Assets Inflation Sensitivity Beta to Change in Global Inflation Rate,* 1970-2011 11.5 Profit from Inflation Rise Protect from Inflation Rise Hurt by Inflation Rise (22) (2.0) Nominal Diversified Real Inflation-Linked Natural Commodity
Slide 24: Real Assets Complement Investors' Allocations
Inflation / Real Assets Complement Investors’ Allocations Real Assets = Our research suggests that a 5-15% allocation of total portfolio for moderate risk investors is sufficient, sourced from higher risk/return assets (e.g., equities or directional alternatives) ® Additional allocations to “Real Bo
Slide 25: AB Index Strategies: Customized Index Solutions
AB Index Strategies: Customized Index Solutions de = Aclient centric approach A focus on delivering customized solutions to meet client needs = Benefiting from smaller size: Flexibility in implementing trading strategies designed to minimize costs = And “best in class” trading infrastructure: Signif
Slide 26: Custom Indices: Flexible Solutions Incorporating Multiple Factors
Custom Indices: Flexible Solutions Incorporating Multiple Factors inden Country / Regions Capitalization weighting Fundamental ratios Dynamic Asset Allocation Sectors Value weighting Factor exposures Volatility triggers Capitalization Risk weighting Dividends Derivative overlays Socially Responsible
Slide 27: Summary: AB Offers a Differentiated Approach to Asset Allocation
Summary: AB Offers a Differentiated Approach to Asset Allocation = AllianceBernstein has unique Asset Allocation capabilities ™ Our tools address the two key investment issues: e The Destination or Long Term Goal (Strategic Allocation) e And the Path or Short-Term Risk Management (Dynamic Allocation
Slide 28: Q & A
AllianceBernstein.com 27 Q & A
Slide 29: ALLIANCEBERNSTEIN
7B ALLIANCEBERNSTEIN