AllianceBernstein Holding LP Q3 2024 Earnings Call Transcript

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

Question: Ben Budish - Barclays - Analyst : Hi, good morning and thanks for taking my questions. I appreciate the updated disclosure on the performance fees. I was wondering if you could talk a little bit more about ABPCI. It looks like, I would presume from in 2023, you had a big pickup in performance fees as rates rose generally. It looks like it's intended to be maybe flattish to up slightly in 2024. So can you talk a little bit more about that strategy, what the kind of growth drivers are, what does that look like and how should we think about, what that may look like in a in a declining rate environment should we see some compression of the fees as rates come down or what are the other factors to consider there?

Question: Ben Budish - Barclays - Analyst : Got it very helpful. And then maybe kind of following up on the same subject, what do you see as the largest --potential future drivers, especially private markets performance? Because I know you, in September announced the launch of a new kind of democratized credit vehicle. What else as we think farther out -- what else should we see as potential adders to that line?

Question: Ben Budish - Barclays - Analyst : All right, appreciate that. Thanks so much.

Question: Robin Holdy - TD Cowen - Analyst : Hi, good morning. This is Robin Holdy on from Bill Katz and thank you for taking the question. I was wondering if we could just touch on the broader private market strategy. If you could provide an update on the timeline to $100 billion in private markets AUM? How you get there from the current $68 billion? Any update on where you think the best opportunities are? And I know you just touched on the contribution from equitable. Maybe if you could quantify that at all and then maybe some of the organic growth there as well?

Question: Robin Holdy - TD Cowen - Analyst : Thank you. That's really helpful. And then maybe if I could just have a quick follow up on the margin guidance for FY25 assuming flat markets, could you remind us of the incremental margin that we might be able to expect on market action and NAV

Question: Robin Holdy - TD Cowen - Analyst : Okay. Thank you very much. Appreciate it.

Question: Craig Siegenthaler - Bank of America - Analyst : Good morning, Seth, Jackie, hope everyone's doing well. After a long wait, the reallocations are finally here. So, and then actually you guys are seeing in both fixed income and the ALTs, but, sadly not as much in active equity. But my question here is after we get through the election and some additional fed cuts, do you think we could get another step up in reallocations and duration extension activity, especially if the yield curve steepens, -- It appears that you guys are still very well positioned for this, just given your business mix and performance.

Question: Craig Siegenthaler - Bank of America - Analyst : Seth, Onur thanks for that. My follow-up is another follow-up on expenses and the op margin. So we've seen some nice improvement already and the Bernstein deconsolidation was a big factor. But the big event we have been waiting for is really in December, when you stop paying rent on your former headquarters at 1345 6th Avenue. So how much of that $50 million run rate should we expect to drop to the bottom line as the lease expires in two months? And it sounds like from the math on the 100 basis points and 150 basis points of margin expansion target that you gave us in the prepared remarks. It sounds like most of that $50 million is dropping the bottom line.

Question: Craig Siegenthaler - Bank of America - Analyst : Thank you, Jackie.

Question: John Dunn - Evercore ISI - Analyst : Hi. Thank you. You guys have talked in the past about increasing your business with third party insurers. You know, you mentioned highlighted investment grade product. Can you give us an update on this channel and the potential outlook and how do you go about making that sale?

Question: John Dunn - Evercore ISI - Analyst : Got it. And then maybe one on private wealth. You guys expressed confidence that outlook for flows in that channel. But maybe you could just talk about stuff that you expect to start inflowing beyond what's already working right now.

Question: John Dunn - Evercore ISI - Analyst : Thanks very much.

Question: Rick Roy - Jefferies - Analyst : Good morning. This is, Rick Roy on for Dan Fannon. And two sets of questions. One focus on the ALTs and then, 11 elsewhere. So on, on CarVal. Now, close to three years since the close. How do you view, I guess the, the current alternatives offering, especially considering the current market dynamic that's going on with CLOs and separately do you have appetite to do additional M&A beyond carve out now, given the timeline since closed? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 2:00PM, AB.N - Q3 2024 AllianceBernstein Holding LP Earnings Call

Question: Rick Roy - Jefferies - Analyst : Understood, appreciate it. And if I could switch gears maybe talking about the APAC strategy. And then kind of separating out into two regions. Obviously, Japan, retail especially has been a source of pretty solid organic growth for you guys. But then also on the other end of the spectrum, talking to obtaining a license in China earlier on here. If you could kind of expand upon these strategies, is there a plan perhaps to expand AUM in the Japan region, perhaps expand into different channels? And then also what is -- has there been any changes to the go-forward strategy for China as well?

Question: Rick Roy - Jefferies - Analyst : Got it. I appreciate the color there and please quick one on CarVal, the update, tax guidance related to the CarVal contingent liability. Is that an expression on perhaps, accounting for future carried interest, relative to when certain obligations were made at the time of the deal or if you could just expand on how that impacted tax balance, if I'm incorrect there?

Question: Rick Roy - Jefferies - Analyst : Got it. Thank you, appreciate it.