Yahoo Finance AllianceBernstein Holding LP (AB) (Q1 2024) Earnings Call Transcript Highlights: Robust Growth ...
Quarterly Revenue: $1.1 billion, up 8% year-over-year.
Operating Income: $242 million, increased by 12%.
Operating Margin: 21.2%, improved by 110 basis points.
GAAP Earnings Per Unit (EPU): $0.67, a 14% increase from the previous year.
Adjusted Operating Income: $267 million, up 12% year-over-year.
Adjusted Operating Margin: 30.3%, an increase of 160 basis points.
Assets Under Management (AUM): $759 billion, up 12% year-over-year.
Net Inflows: Retail $4.2 billion; Institutional outflows of $4.2 billion; Private Wealth net inflows of $500 million.
Fixed Income Performance: 91% of assets outperformed over 1 year; 71% over 3 and 5 years.
Equity Performance: 40% of equity assets outperformed over 1 year; 50% over 3 and 5 years.
First Quarter Gross Sales: $32.6 billion, up 27% from the previous year.
Dividend and Interest Revenues: Net of broker-dealer interest expense was flat.
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Given all the moving parts to the margin story from here, could you update the flight path, the way you think the end margins get, maybe with or without the impact of market action? A: Jacqueline Marks, CFO of AllianceBernstein, responded that the company is continuing with its expectations, maintaining previous guidance that several ongoing initiatives will add 350 to 500 basis points incrementally. This includes benefits from the Nashville relocation among other factors. The company continues to evaluate efficiencies, scale, and strategic investments for further opportunities.
Q: Can you provide clarity on the guidance for the second quarter G&A expenses? Is it based on the first quarter's actual number? A: Jacqueline Marks clarified that the guidance for G&A expenses in the second quarter is indeed based on the first quarter's actual numbers, taking into account the one-time Tennessee credit of $20.8 million which is not recurring but offsets increased rent expenses for the year.
Q: With several players focusing on growth through democratization, including installed alternative managers, how do you see the opportunity for growth in terms of incremental market share? A: Onur Erzan, Head of Global Client Group & Head of Private Wealth, highlighted AllianceBernstein's unique position due to its multi-channel strategy. This includes leveraging strong distribution partnerships and experience in private credit and alternative strategies across retail and private wealth channels, which positions them well to gain market share and expand sales.
Q: Where do you see the biggest area of growth in the U.S. retail market? A: Mark Gessner, Head of US Retail, indicated that the biggest growth opportunities are likely in the RIA and independent broker-dealer channels where new pools of high net worth households are forming. He emphasized the company's differentiated product set across investment vehicles as a key advantage.
Q: Could you discuss the institutional opportunity today compared to a year ago, particularly in terms of engagement and potential wins? A: Seth Bernstein, CEO, noted an increase in conversations around fixed income and value equity searches, with more activity in private alternatives. The company is seeing a mix of reallocations from equities to fixed income and interest across various asset classes, indicating a diverse set of opportunities.
Q: Can you provide more details on the demand and gross sales in Private Wealth, particularly which products are seeing the most interest? A: Onur Erzan explained that in Private Wealth, there is strong demand for alternative assets, structured multi-asset solutions, and tax-optimized products like the proprietary direct indexing tax-optimization solution PATH. The focus is on products that meet the diverse needs of high-net-worth and ultra-high-net-worth clients.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
