Financial Data and Key Metrics Changes - Firm-wide assets under management (AUM) reached $860 billion, with a record high of $153 billion in Bernstein Private Wealth [4][5] - Adjusted earnings per unit increased by 12% year-over-year to $0.86, while net revenues rose by 5% to $885 million [25][26] - Total adjusted operating expenses remained flat at $582 million, with total compensation and benefits expenses increasing by 6% to $439 million [26][28] Business Line Data and Key Metrics Changes - Institutional asset management business AUM stood at $351 billion, while the retail platform AUM was $356 billion [4] - Tax-exempt fixed income saw over $4 billion in inflows, marking 11 consecutive quarters of positive organic growth [6][7] - Private markets generated nearly $3 billion in net inflows, reflecting improved conditions in commercial real estate [7][8] Market Data and Key Metrics Changes - The U.S. equity markets delivered strong returns, with the S&P 500 returning 8.1% in Q3 2025 [11] - Emerging markets outperformed, while global developed equities underperformed compared to the U.S. [12][13] - The firm observed a rebound in client flows into American Income, indicating renewed interest in U.S. dollar-denominated assets [10] Company Strategy and Development Direction - The company aims to expand its third-party insurance asset management business, leveraging partnerships like the one with Fortitude [8][9] - A strategic alliance with Equitable enhances the firm's competitive advantage, allowing for the scaling of higher-fee private alternative strategies [9][10] - The focus remains on scalable, long-duration assets that align with sustainable organic growth and long-term profitability [31][34] Management's Comments on Operating Environment and Future Outlook - Management maintains a positive outlook on fixed income, anticipating a reallocation wave as bonds regain diversification value [11] - The firm is well-positioned to capture growth opportunities in Asia, particularly in taxable fixed income [47][49] - The company is committed to investing in growth initiatives while maintaining expense discipline [34][56] Other Important Information - The firm has successfully expanded its private markets platform to nearly $80 billion, representing a 17% year-over-year growth [22] - The effective tax rate for the third quarter was 6%, consistent with full-year guidance [28] - The firm is raising its full-year performance fee guidance to $130 million-$155 million, driven by strong public market performance [32] Q&A Session Summary Question: Can you elaborate on the insurance opportunity and the Ruby Re sidecar? - Management expressed excitement about the insurance asset management business, confirming that the Ruby Re relationship is performing as expected and that the FCA REIT sidecar is additive to their strategy [38][40] Question: What is the outlook for private credit and credit quality? - Management noted competitive environments in private credit but reassured that there is no material deterioration in credit quality, with manageable maturities and positive cash flow generation [42][43] Question: How is the Asia business performing post-trade conflicts? - The Asia business showed improvement, particularly in taxable fixed income, with strong engagement from institutional clients despite external noise [47][48] Question: What is the capital allocation strategy regarding buybacks? - The light buyback in the quarter was attributed to timing rather than any strategic shift, with plans to continue funding the deferred compensation plan [57] Question: How is the firm positioned for the bond reallocation? - Management indicated that they are well-positioned to benefit from the bond reallocation, particularly in Asia, with a strong distribution capability [60][61]