AllianceBernstein L.P.(US:AB)2025-10-23 15:00Financial Data and Key Metrics Changes - Firm wide assets under management (AUM) reached $860 billion, marking a new milestone [6] - Adjusted earnings per unit for Q3 were $0.86, a 12% increase year-over-year [40] - Net revenues for Q3 were $885 million, reflecting a 5% increase compared to the prior year [41] - Total adjusted operating expenses were roughly flat at $582 million compared to the prior year [42] - Adjusted operating margin rose to 34.2%, a 209 basis point increase from the prior year [51] Business Line Data and Key Metrics Changes - Bernstein Private Wealth AUM reached a record high of $153 billion, focusing on ultra high net worth clients [7] - Institutional asset management business AUM stood at $351 billion, catering to long duration capital pools [7] - Retail platform AUM was $356 billion, with strong growth in tax exempt fixed income and private alternatives [7][8] - Tax exempt inflows exceeded $4 billion, extending positive organic growth to 11 consecutive quarters [8] - Private markets generated nearly $3 billion of net inflows, reflecting improved conditions in commercial real estate [9] Market Data and Key Metrics Changes - U.S. equity markets delivered strong returns, with the S&P 500 returning 8.1% in Q3 [18] - Small cap stocks outperformed large caps, with the Russell 2000 returning 12.4% [19] - Taxable fixed income sentiment improved, leading to slight net inflows in Q3 [22] - The firm is the number one retail municipal SMA manager, with a 26% annualized organic growth rate in tax exempt retail inflows [90] Company Strategy and Development Direction - The company is focused on expanding its insurance asset management business, with new partnerships and strategic investments [12] - A commitment to providing better outcomes for clients through diversified investment expertise and distribution capabilities [6] - The firm aims to achieve $90 billion to $100 billion in private markets AUM by 2027 [39] - Continued innovation in retirement solutions, including customized target date funds and lifetime income strategies [27][30] 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 [17] - The company is well-positioned to capture growth opportunities in Asia, particularly in taxable fixed income [67] - Management expressed confidence in the stability of credit quality despite market volatility [62] - The firm is focused on enhancing margins and operational efficiency while investing in growth initiatives [52] Other Important Information - The firm has successfully onboarded seven new insurance GA relationships across eight strategies [13] - The effective tax rate for Q3 was 6%, in line with full year guidance [44] - The company is committed to distributing 100% of adjusted earnings to unitholders [40] Q&A Session Summary Question: Can you elaborate on the insurance opportunity and the Ruby Re timeline? - Management expressed excitement about the insurance asset management business and clarified that the timing of funding for Ruby Re has not changed [54][56] 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 [62] Question: How is the Asia business performing post-Liberation Day? - Management reported improvement in the Asia business, particularly in taxable fixed income, and noted strong engagement from institutional clients [67] Question: Can you clarify the capital allocation strategy regarding buybacks? - Management indicated that the light buyback activity was due to timing and not related to the Equitable conversion [82] Question: What is the outlook for bond reallocation and its impact on performance? - Management highlighted ongoing appetite for taxable fixed income and expressed confidence in capturing market share through innovative products [88]