Headline: AllianceBernstein Surpasses $800 Billion in AUM in Q3

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Headline: AllianceBernstein Surpasses $800 Billion in AUM in Q3

AllianceBernstein Holding L.P. (NYSE: AB) reported a strong performance in its review of the third quarter earnings for 2024. CEO Seth Bernstein announced that the company's assets under management (AUM) exceeded $800 billion. The company experienced consistent net inflows for three consecutive quarters, noted significant growth in its private markets platform, and registered a considerable increase in adjusted earnings per unit. Despite some challenges, AllianceBernstein remains optimistic about its growth strategy, particularly in private markets and active ETFs.

Key Highlights:

  • AllianceBernstein's AUM surpassed $800 billion, with $6 billion in inflows to active fixed-income products.
  • Year-to-date inflows saw a 50% increase compared to the entire year of 2023.
  • The retail business recorded its highest quarterly inflow since 2021, while institutional outflows amounted to $4.4 billion.
  • The private markets platform reached $68 billion in AUM, with ambitions to hit $100 billion.
  • Adjusted earnings per unit rose 19% year-over-year to $0.77.
  • Net revenues remained steady at $845 million, with a slight decline in performance fees.
  • The adjusted operating margin increased by 330 basis points to 31.3%.
  • The company raised $700 million in alternative products during Q3, including the launch of the CarVal Interval Fund.

Company Outlook:

  • AllianceBernstein aims for sustained growth in private markets towards a $100 billion AUM target.
  • The company plans to expand existing funds, launch new products, and extend teams, particularly in private credit.
  • The partnership with Equitable and a $20 billion commitment is expected to support growth.
  • The firm is focusing on performance fees in retail and insurance channels, projecting a 33% margin for the fiscal year 2025.

Negative Aspects:

  • There were outflows in active equity strategies, impacting channel flows.
  • Institutional outflows totaled $4.4 billion.
  • Performance fees decreased by $2 million compared to the previous year, expected to range between $145 million and $155 million for the full year 2024.

Positive Aspects:

  • The company reported its highest quarterly retail inflow since 2021.
  • Private wealth management saw modest inflows with strong growth in tax-free offerings and alternative products.
  • Expected deals for funding reached $10.1 billion, with $1.9 billion funded in Q3.

Shortcomings:

  • Active equity outflows reached $4.5 billion.
  • The fee rate for expected deals dropped due to the funding of higher-fee alternative mandates and the impact of lower-fee mandates.

Q&A Highlights:

  • AllianceBernstein expresses confidence in the growth of its middle-market lending platform and third-party insurance investments.
  • The firm sees potential in expanding relationships with third-party insurers and international markets, including Asia.
  • The active ETF initiative has reached over $5 billion in AUM across 15 products in two years, with plans for international expansion.

In conclusion, AllianceBernstein’s third-quarter results reflect a company effectively leveraging growth opportunities in private markets and ETFs while navigating market challenges. With strong inflows in active fixed-income products and a strategic focus on expanding its private markets platform, the company is positioned for continued progress in the upcoming quarters.

InvestingPro Insights:

  • AllianceBernstein's robust third-quarter performance is further illuminated by key metrics derived from InvestingPro. The company's market cap stands at $4.39 billion, underscoring its significant presence in the asset management sector. With a P/E ratio of 13.26, AllianceBernstein seems to trade at a reasonable valuation relative to its earnings, aligning with the reported increase in adjusted earnings per unit.
  • Among the most striking InvestingPro tips is AllianceBernstein’s significant dividend payments to shareholders, with a current dividend yield of 7.54%. This high yield is particularly noteworthy given the company's remarkable streak of sustaining dividend payments for 37 consecutive years, demonstrating its long-term value creation commitment to shareholders. This consistent dividend policy might be especially attractive to income-focused investors in light of the company's recent performance and growth initiatives.
  • Additionally, AllianceBernstein is trading near its 52-week high, with its stock price at 98.46% of its 52-week peak. This metric supports the positive momentum suggested by the company's reported AUM growth and improved operating margin. A 42.46% 1-year price total return further underscores the stock's strong performance, which can be attributed to the company’s successful execution of its growth strategy, particularly in private markets and active ETFs.
  • It is noteworthy that InvestingPro offers 8 additional tips for AllianceBernstein, providing investors with a more comprehensive analysis of the company’s financial health and market positioning. These insights could be valuable for those looking to make informed investment decisions based on a broader array of financial metrics and expert observations.