AllianceBernstein Holding LP Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alexander Blostein - Goldman Sachs - Analyst : Hi, good morning. Thank you. And Tom, welcome to the call. Question to you guys starting maybe with the asset allocation trends you guys have seen so far in the second quarter. Obviously super volatile backdrop, lots of uncertainty. It seems like the retail channels starting to look a little bit softer, including on the fixed income side, which has been historically a source of strength for you guys. So how do you expect, the retail channel, I guess, to behave, as we kind of deal with the current backdrop and. Seth, curious in particular, when it comes to non-US retail, given your distribution footprint there how that channel is performing and the outlook there? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 2:00PM, AB.N - Q1 2025 AllianceBernstein Holding LP Earnings Call

Question: Alexander Blostein - Goldman Sachs - Analyst : Yeah, I agree with you there. Thanks. A good great detail, for my follow up question, I just wanted to ask you guys around the equitable dynamics and now with the tender results, known, and participation was relatively limited, and I was curious if you could expand on maybe some of the structural benefits to equitable, from having AllianceBernstein as a public company. Do you ultimately see the willing to acquire more over time or kind of how do you think that relationship plays out over the next several years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 2:00PM, AB.N - Q1 2025 AllianceBernstein Holding LP Earnings Call

Question: Alexander Blostein - Goldman Sachs - Analyst : Right. That's super helpful. Thank you, guys.

Question: Craig Siegenthaler - BofA Global Research - Analyst : Good morning, Seth and Tom. I hope everyone's doing well. I had two follow-ups to Alex's last question. The first one is EQH taking a more active role in the management of AB, which I thought was run fairly autonomously over the last 20 years across three CEOs. And then the follow up would be, are there any limits in place to prevent EQH from buying more stock in the future?

Question: Craig Siegenthaler - BofA Global Research - Analyst : Thanks, Seth. Just a follow up, your retail Muni SMA flows have been really strong. They might actually be the leading driver of organic growth at AB, but you can correct me if I'm wrong. But we, US lawmakers now are discussing the removal or even cap of the tax exemptions on Muni bond interests. So if enacted, do you see that as a headwind to flows, or do you think the secular drivers? Of Muni in the SMA wrapper are so powerful that can sort of power right through that sort of issue?

Question: Craig Siegenthaler - BofA Global Research - Analyst : Thanks.

Question: Bill Katz - TD Cowen - Analyst : Okay, thank you very much, and Tom, congratulations on the new role. Maybe start with on the expense side, I think if I heard you correctly, no change to the prior guide on non-com of $600 million to $625 million. So is the first quarter just some delay of spend and that that might accelerate into the back half of the year, or what kind of flex would you have if the revenue backdrop were not to play out against your base assumptions?

Question: Bill Katz - TD Cowen - Analyst : Right. Yeah, for sure. Thank you. And then maybe a big picture question, doing very well on the Alts side. I think we're going to pack that a little bit. What's the allocation in the private wealth side now to all? How much further do you think you have to sort of take that? I think last recollection is something around 10%, but just correct me on that. And then maybe you can unpack a little bit about some of the success factors you're having on the third party side, and which products you're seeing the most traction and where you see the greatest incremental distribution connectivity? Thank you.

Question: Bill Katz - TD Cowen - Analyst : Thank you very much for that.

Question: Benjamin Budish - Barclays - Analyst : Hi, good morning, and thanks for taking the question. I wanted to check on your private markets fee expectation, I guess first, Tom, it sounds like you indicated that the expectation for this year was a guide up. When I was looking at the transcript from the last call, I think the commentary was $70 million to $75 million of recurring hurdle-based performance fees. I just want to make sure I have the right sort of apples to apples comparison. And then the other piece I was curious about, in the slides you indicate that ABPCI is the majority of private markets performance fees. Curious, could you remind us what were the other big pieces in '23 and '24 that drove higher private markets fees and is there potential for that to recur if conditions are correct, or do you feel pretty good about the sort of $70 million to $80 million full year that you're looking at for '25?

Question: Benjamin Budish - Barclays - Analyst : Yeah, just the commentary. So the -- or sorry, it's the commentary for '25 for what you gave last quarter versus what you're saying today. So how does the $70 million to $75 million compared to what you're saying today of $90 million to $105 million? Like I assume the prior would not have included public markets, but.

Question: Benjamin Budish - Barclays - Analyst : That would okay, that's helpful. And then maybe a broader question on private markets, you talked a little bit about investment grade, private credit. It's a huge theme we hear about from some of the other alternative managers. Just curious, how much of your private markets activity today is investment grade and when you talk about sort of expanding to other third party insurance partners or other LPs sort of or even other, wealth clients sort of outside your current your wealth business, how much, how important is investment grade as part of that strategy? Thank you.

Question: Benjamin Budish - Barclays - Analyst : All right, thank you very much, very helpful.

Question: Daniel Fannon - Jefferies - Analyst : Thanks. Good morning. Just wanted to one more clarification on the performance fee outlook is the public markets numbers, this is just being conservative where you're assuming no performance fees because the performance is yet to be crystallized, or is there a start of the year? Can you give us an update maybe on how those strategies are looking to give us a sense of what that might actually come to? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 2:00PM, AB.N - Q1 2025 AllianceBernstein Holding LP Earnings Call

Question: Daniel Fannon - Jefferies - Analyst : Understood. And then just a follow up on advisor productivity and just within the private wealth you talked about that improving. Can you talk about the mix of new advisors versus existing advisors and whether the newer ones coming on board that you're actively recruiting more aggressively are the ones that are more productive or it's more broad based.

Question: Bill Katz - TD Cowen - Analyst : Thanks. I just appreciate the follow up. A couple of sort of modeling it's just tracking to. Tom, just to follow up on the public side of performance fees, is there a way to give us a sense of either AUM they're eligible for performance fees and or how those relative funds, those funds are doing either relative or absolute return at the end of the Q1 versus maybe 12/31 as we think through sort of the incremental upside?

Question: Bill Katz - TD Cowen - Analyst : I understand. Yeah, I'm sorry to interrupt. No, it's more on the public side. I'm just trying to get a sense of what how to think through the upside to that $0 million to $5 million guide on page 12 of the slide deck. Think about just how is absolute relative performance sitting at 3/31 versus 12/31 or are there any high water mark issues that we have to sort of contemplate.

Question: Bill Katz - TD Cowen - Analyst : Okay, and just you've mentioned in your commentary that there could be some pressure on the base fee rate given the market backdrop, if that makes sense. Is there a way you could give us what the exit fee rate was on the base fee rate at 3/31 maybe versus the average for the quarter at the prior actual number?

Question: Bill Katz - TD Cowen - Analyst : Okay, thank you very much.

Question: John Dunn - Evercore ISI - Analyst : Thank you. Maybe the pipeline being up is great. Can you just maybe give us a little more flavor of the temperature of different parts of the institutional side of the business and also maybe kind of look geographically if there's any, different appetite for risk in different regions.

Question: John Dunn - Evercore ISI - Analyst : Got it. And then, US growth equities in Japan, so distributed in Japan have been a nice tail for you guys. Are you seeing any kind of early signals of non-US investors avoiding the US (technical difficulty) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 2:00PM, AB.N - Q1 2025 AllianceBernstein Holding LP Earnings Call

Question: John Dunn - Evercore ISI - Analyst : (technical difficulty) Japanese or other non-US investors avoiding investing in US stocks?

Question: John Dunn - Evercore ISI - Analyst : Thank you.