Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q3 2024 Earnings Presentation
29 slides from Alliancebernstein Holding L.p's earnings presentation, Oct 24, 2024
Slide 1: Third Quarter 2024 Review
Third Quarter 2024 Review October 24, 2024 Seth P. Bernstein, President & Chief Executive Officer Jackie Marks, Chief Financial 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: AB's Unique Value Proposition
AB’s Unique Value Proposition Integrated asset and wealth manager with differentiated capabilities, partnerships and structure Differentiated Distribution Platform, with Proprietary Private Wealth Channel 1 Advantageous competitive positions in growing markets: APAC, US HNW, Global Insurance Diversi
Slide 4: Key Business Highlights Third Quarter 2024
Key Business Highlights Third Quarter 2024 Third Straight Quarter of Firmwide Net Inflows, Headlined by Retail Fixed Income 1 • Active Fixed Income inflows totaled $6.0 billion, buoyed by Retail demand for Taxable and Tax-Exempt • Active Equity outflows of -4.5 billion, concentrated in Institutions,
Slide 5: Key Financial Highlights Third Quarter 2024
Key Financial Highlights Third Quarter 2024 3Q24 3Q23 2Q24 AUM and Flows End of Period AUM $805.9 $669.0 $769.5 (USD Billions, Except Fee Rate) Average AUM $785.9 $689.6 $755.5 Equitable ("EQH") AUM $133.4 $109.0 $127.1 Private Markets AUM* $68 $61 $64 Gross Sales $35.5 $25.2 $31.9 Net Flows $1.1 ($
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 89 92 73 75 74 73 71 77 70 68 65 62 60 59 3Q:23 4Q:23 1Q:24 2Q:24 3Q:24 3Q:23 4Q:23 1Q:24 2Q:24 3Q:24 3Q:23 4Q:23 1Q:24 2Q:24 3Q:24 Equities One-Year Three-Year Five-Year 68 63 65 63 63 64 67 54 55 48 55
Slide 7: Retail Highlights
Retail Highlights Near Record Sales and Flows Momentum in Retail Driving Steady Growth in Adjusted Management Fees USD billions USD millions Gross Sales Gross Redemptions Net Flows Base Fees Performance Fees $26.6 $23.8 $23.2 $21.0 $16.9 $14 $3 $4.2 $5.4 $1.6 $1.3 $2.8 $365 $329 $338 $307 $303 ($15.
Slide 8: Institutional Highlights
Institutional Highlights Active Equity Redemptions Outweigh Fee-Accretive Flows Recent Fundings Largely Replaced by Fixed Income USD Billions Gross Sales Gross Redemptions Net Flows $ Billions Pipeline AUM (EoP) Fee Rate (Bps) Incl. Private Placements 57bps 56bps 56bps $4.3 $4.2 $14 60 $3.0 $3.3 $3.
Slide 9: Private Wealth Highlights
Private Wealth Highlights Flows and Sales Mix Reflect Sequential Improvement Diversified Revenue Streams, Uncaptured in Base Fee Rate USD Billions USD millions Gross Sales Gross Redemptions Net Flows Base Fees Performance Fees Net Interest Margin $5.5 $5.4 $4.0 $4.3 $4.7 $15 $19 $18 $18 $23 $0.5 $19
Slide 10: Select Adjusted Financials and Ratios
Select Adjusted Financials and Ratios Revenues 3Q24 3Q23 Percent ∆ 2Q24 Percent ∆ Base Fees* $785 $690 14% $742 6% Performance Fees: Private Markets† 24 26 (4)% 25 (2)% Public Markets 2 2 —% 17 (89)% Bernstein Research Services — 94 n.m. 0 n.m. Investment Gains 0 — —% 4 n.m. Dividend & Interest Reve
Slide 11: Base Fee Rate Has Stabilized Year-to-Date
Base Fee Rate Has Stabilized Year-to-Date Firmwide Base Fee Rate—Last Three Years Basis points Supportive 42 • Alts deployments • Rotation from MMKTs to FI • Organic and AUM growth in 41 Equity MFs, Offshore FI • Organic and AUM growth in 39.9bps Private Wealth, Offshore 40 Retail, Institutional Alt
Slide 12: Large Portion of Recurring Performance-Related Fees, Driven by Privates
Large Portion of Recurring Performance-Related Fees, Driven by Privates Annual Performance Fees—Private and Public Markets USD Millions • We our tightening our FY24 guidance for performance >2X $145-$155 fees to $145–$155 million $20-25 • Firmwide performance fees have more than doubled since $126 F
Slide 13: Assuming Neutral Markets, Launching Point for FY25 Margins is 33%
Assuming Neutral Markets, Launching Point for FY25 Margins is 33% Adjusted Operating Margin Path and FY25 Outlook 3Q Adj. Operating Margin = 31.3% +100-150bps 33% +310bps 1 Scale/AUM (+) 2 BRS (+) ~$12m lease 3 expense pull- forward (-) NYC Relocation FY25 Baseline 4Q:24E Adjusted Margin As of 9/30/
Slide 14: Appendix
Appendix 3Q24 Earnings Review 14
Slide 15: 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 (1.3) 63 1.7 43 1.2 35 2.2 13 Concentrated Growth (10.4) 93 (2.4) 78 (
Slide 16: Retail Mutual Funds Relative Performance vs. Morningstar Averages
Retail Mutual Funds Relative Performance vs. Morningstar Averages 1 Year 3 Year 5 Year 10 Year Service Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Fixed Income American Income 2.2 15 (0.4) 56 (0.7) 67 0.4 32 European Income 3.8 12 (0.1) 54 0.1 43 1
Slide 17: 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 4.7 (3.3) 2.4 3.2 Concentrated Global Growth (9.3) (8.7) (4.3) 0.2 Global Core (3.2) (1.8) (1.8) 0.4 International Strategic Core 6.9 1.6 (0.0) 1.8 Sustainable Global Thematic
Slide 18: Assets Under Management: 3Q24
Assets Under Management: 3Q24 (US $ Billions) September 30, 2024 June 30, 2024 Institutions Private Wealth Retail Total Total Equity Actively Managed $55 $55 $161 $271 $264 Passive (1) 24 6 39 69 66 Total Equity 79 61 200 340 330 Fixed Income Taxable 122 19 76 217 216 Tax-Exempt 2 29 40 71 67 Passiv
Slide 19: Three Months Ended 9/30/24: AUM Roll-Forward by Distribution Channel
Three Months Ended 9/30/24: 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 $154.7 $3.6 $(0.2) $(1.7) $1.7 $6.7 $8.5
Slide 20: Three Months Ended 9/30/24: AUM Roll-Forward by Investment Service
Three Months Ended 9/30/24: 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 Transfers Performance Change of Period Equity Active US $180.6 $10.1 $(7.7) $(2.7) $(0.
Slide 21: Three Months Ended 9/30/24: Active vs. Passive Net Flows
Three Months Ended 9/30/24: Active vs. Passive Net Flows Actively Passively Managed Managed (1) Total Equity $(4.5) $(1.1) $(5.6) Fixed Income 6.0 (0.3) 5.7 Alternatives/MAS (2) 0.7 0.3 1.0 Total $2.2 $(1.1) $1.1 (1) Includes index and enhanced index services. (2) Includes certain multi-asset soluti
Slide 22: Assets Under Management By Region
Assets Under Management By Region Institutional Geographic Breakdown Retail Geographic Breakdown Japan Other Other APAC ex 3% 4% 2% Japan 6% EMEA 9% Japan EMEA 12% 11% APAC ex Japan US US 18% 59% 76% $335.2B $334.5B As of September 30, 2024 By Client Domicile Percentages may not add up to 100% due t
Slide 23: Third Quarter 2024 GAAP Income Statement
Third Quarter 2024 GAAP Income Statement Income Statement (in US $ Millions) 3Q24 3Q23 %∆ 2Q24 %∆ Base Fees $814 $721 13 % $774 5% Performance Fees 29 28 3% 43 (34)% Bernstein Research Services 0 94 (100)% 0 n/m Distribution Revenues 189 149 27 % 173 9% Dividends & Interest 39 50 (22)% 44 (12)% Inve
Slide 24: Third Quarter 2024 Adjusted Advisory Fees
Third Quarter 2024 Adjusted Advisory Fees 3Q24 3Q23 %∆ 2Q24 %∆ Ending AUM ($ Billions) $806 $669 21 % $770 5% Average AUM ($ Billions) $786 $690 14 % $756 4% By Fee Type ($ Millions): Adjusted Base Fees(1) $785 $690 14 % $742 6% Adjusted Performance Fees 26 28 7% 42 (38)% Total $811 $718 13 % $784 3
Slide 25: Third Quarter 2024 GAAP to Non-GAAP Reconciliation
Third Quarter 2024 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ RE Acq Equity Related Through Comp. Consol Credits Related Method Interest GAAP Payments Adjustments Inv. VIE (Charges) Expenses Investm Expense Non-GAAP (A) (B) (C) (D) (E) (F) (G) (H) I
Slide 26: Third Quarter 2023 GAAP to Non-GAAP Reconciliation
Third Quarter 2023 GAAP to Non-GAAP Reconciliation In US$ Thousands Adjustments Distribution Pass Deferred NCI/ Real Est. Acq Related Through Comp. Consol Credits Related Interest GAAP Payments Adj. Inv. VIE (Charges) Expenses Expense Non-GAAP (A) (B) (C) (D) (E) (F) (G) Investment advisory and serv
Slide 27: Second Quarter 2024 GAAP to Non-GAAP Reconciliation
Second Quarter 2024 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Equity (Gain) loss Related Through Comp. Consol Credits Related Method Interest on GAAP Payments Adjustments Inv. VIE (Charges) Expenses Investment Expense Dives
Slide 28: 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 29: AllianceBernstein
ALLIANCEBERNSTEIN'
AllianceBernstein Holding L.P. Units — Q3 2024 Earnings Presentation on 6ix