AllianceBernstein L.P.(AB)2025-02-14 21:24Assets Under Management (AUM) - Total Assets Under Management (AUM) as of December 31, 2024, were $792.2 billion, an increase of $67.0 billion or 9.2% from the previous year, driven by market appreciation of $68.5 billion, partially offset by net outflows of $2.2 billion[201]. - Institutional AUM increased by $4.3 billion, or 1.3%, to $321.4 billion, primarily due to market appreciation of $20.7 billion, despite net outflows of $16.5 billion[202]. - Retail AUM rose by $47.5 billion, or 16.6%, to $334.3 billion, driven by market appreciation of $34.2 billion and net inflows of $13.4 billion[203]. - Private Wealth Management AUM increased by $15.2 billion, or 12.6%, to $136.5 billion, mainly due to market appreciation of $13.6 billion and net inflows of $0.9 billion[204]. - Total assets under management reached $792.2 billion as of December 31, 2024, up 9.2% from $725.2 billion in 2023[238]. - The total equity assets under management increased to $331.7 billion in 2024, a rise of 7.2% from $309.6 billion in 2023[238]. - The Institutional channel's average AUM rose to $322.9 billion in 2024, a 6.0% increase from $304.6 billion in 2023, while ending AUM increased by 1.3% to $321.4 billion[247]. - The Retail channel's average AUM reached $315.3 billion, a significant increase of 20.4% compared to $262.0 billion in 2023, with ending AUM at $334.3 billion[248]. - The Private Wealth Management channel's average AUM grew by 14.6% to $130.3 billion in 2024, with ending AUM at $136.5 billion, reflecting a 12.6% increase[249]. - Market appreciation contributed $68.5 million to the total assets under management in 2024, with $20.7 million from institutions and $34.2 million from retail[241]. - The company reported a net change of $67.0 billion in total AUM from December 31, 2023, to December 31, 2024[243]. Financial Performance - Net revenues for 2024 were $4.5 billion, an increase of $319.8 million, or 7.7%, compared to $4.2 billion in 2023, primarily due to higher investment advisory base fees and distribution revenues[206]. - Operating income increased by $306.4 million, or 37.5%, to $1.1 billion, with an operating margin rising to 24.7% from 19.1% in 2023[208]. - Net income attributable to AB Unitholders was $1.173 billion in 2024, reflecting a 53.4% increase from $764.6 million in 2023[224]. - For the year ended December 31, 2024, adjusted diluted net income per AB Holding Unit was $3.25, an increase from $2.69 in 2023, reflecting a growth of 20.8%[229]. - The company reported a net income of $423.4 million for the year ended December 31, 2024, compared to $264.2 million in 2023, representing a significant increase of 60.3%[229]. - Cash distributions to Unitholders increased by $45.1 million in 2024, totaling $340.5 million, compared to $294.0 million in 2023[233]. - The company recognized a gain of $128.5 million in contingent payment arrangements related to the acquisition of AB Carval in 2022[254]. - Total net revenues for 2024 increased by $319.8 million, or 7.7%, reaching $4,475.1 million compared to $4,155.3 million in 2023[282]. - Investment advisory and services fees rose by $466.7 million, or 15.7%, in 2024, driven by a $340.6 million increase in base fees and a $126.1 million increase in performance-based fees[288]. - Performance-based fees surged by $126.1 million, or 87.0%, in 2024, primarily due to higher fees from several funds, including the Financial Services Opportunities fund[289]. - Distribution revenues increased by $140.4 million, or 23.9%, in 2024, attributed to a 20.0% rise in average AUM of mutual funds[295]. Expenses and Costs - Total expenses for 2024 were $3,351,066,000, a slight increase of 0.4% from $3,337,653,000 in 2023[254]. - Higher base advisory fees contributed $340.6 million to the increase in net income for 2024[254]. - Employee compensation and benefits expense increased by $32.6 million, or 1.8%, in 2024, primarily due to higher incentive compensation of $92.9 million and higher commissions of $27.9 million[305]. - Promotion and servicing expenses increased by $119.7 million, or 13.9%, in 2024, driven by higher distribution-related payments of $132.1 million and higher amortization of deferred sales commissions of $21.2 million[308]. - General and administrative expenses increased by $17.6 million, or 3.0%, in 2024, with a percentage of net revenues at 13.4% compared to 14.0% in 2023[309]. - Interest expense decreased by $10.9 million in 2024, with average daily borrowings at $762.4 million and a weighted average interest rate of 5.3%[313]. - Income tax expense increased by $36.1 million, or 124.2%, in 2024, resulting in a higher effective tax rate of 5.2% compared to 3.6% in 2023[318]. Cash Flow and Liquidity - The net cash provided by operating activities for the year ended December 31, 2024, was $340.5 million, compared to $294.0 million in 2023, marking an increase of 15.8%[231]. - Net cash provided by operating activities was $1.4 billion in 2024, compared to $0.9 billion in 2023, primarily due to higher earnings of $312.5 million[322]. - Net cash used in investing activities was $115.7 million in 2024, compared to $33.6 million in 2023, mainly due to higher purchases of furniture and equipment[323]. - In 2024, net cash used in financing activities was $1.6 billion, an increase from $1.0 billion in 2023, primarily due to higher debt repayments of $608.6 million and cash distributions to Unitholders of $115.2 million[325]. - As of December 31, 2024, AB had $832.0 million in cash and cash equivalents, with $460.1 million held by foreign subsidiaries[326]. - Management believes cash flow from operations and debt issuance will provide adequate liquidity for financial obligations[328]. - AB's financial condition allows for adequate liquidity for general business needs, supported by access to public and private debt markets[328]. Strategic Initiatives - The joint venture with Societe Generale was completed on April 1, 2024, with AB retaining the Bernstein Private Wealth Management business[216]. - The joint venture with Societe Generale aims to enhance services for institutional investors, indicating a strategic market expansion[394]. - AB provides a broad range of investment services, including institutional, retail, and private wealth management, with a focus on ESG and alternative investments[394]. - AB's focus on sustainable and responsible investment strategies aligns with growing client demand for ESG-focused portfolios[394]. Ownership and Structure - The weighted average equity ownership interest in AB was 39.4% in 2024, slightly up from 39.2% in 2023[229]. - AB's ownership structure as of December 31, 2024, shows EQH and its subsidiaries holding 61.9%, AB Holding at 37.5%, and unaffiliated holders at 0.6%[395]. - AB Holding's investment in AB is recorded using the equity method, reflecting its share of AB's income and losses[398]. Market Conditions and Risks - The ability to access public and private capital markets may be limited by adverse market conditions and changes in credit ratings[355]. - The company's financial condition is subject to the performance of capital markets and the ability to maintain and grow client assets under management[355]. - A 10% decrease in equity prices would result in a $33,338,000 decrease in the fair value of other investments as of December 31, 2024[360].