AllianceBernstein Holding LP Q4 2024 Earnings Call Transcript

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

Question: Craig Siegenthaler - Bank of America - Analyst : And my question is actually a follow-up to Jackie's comments earlier today on the EQH call on your corporate structure. So in my coverage, AB is the only remaining company that still doesn't exist in a C corp structure. And now there's lots of examples across my coverage of companies that gained more passive ownership, more lonely active ownership and more importantly, a much higher stock valuation. So I'm curious to how AB thinks about that, the pros and the cons, because it looks like tax dilution is only something like 10% or low teens or LPs,

Question: Craig Siegenthaler - Bank of America - Analyst : Thank you for the comments. And I'll jump on to your question, but I think the tax debate is definitely a real one, although I do think if EQH remains the GP, they can -- your float can get in major indexes because that is an FCC corp. We've seen that a lot over the last eight years, but I'm going to circle up my index team on that. And let me jump on to bond reallocation. So there was some noise in 4Q, and the 10-year rose a lot, which definitely didn't help. But I wanted your updated high-level thoughts on the pace of some of this record money market AUM could move off the sidelines via duration extensions and how AB is positioned to win in both taxable and munis, where you're already doing really well.

Question: Alexander Blostein - Goldman Sachs & Co. - Analyst : I was hoping to spend a couple of minutes on your organic [basic] growth. I think it's the first time where you started to disclose that, perhaps more kind of officially in the deck, 3%-plus for the year, so helpful there. I was wondering if you could take a step back, and I know you don't have an explicit target, but as you look through the building blocks in the business, what you're trying to achieve? Where are you seeing traction? How durable do you think this mid or low single-digit organic base fee growth is for the company? What do you hope it can go over the next couple of years?

Question: Alexander Blostein - Goldman Sachs & Co. - Analyst : All right. Fair enough. And maybe just a quick follow-up to Craig's question around the corporate structure and what sounds like index conversion that's -- or sorry, C corp conversion that's relatively off the table for now. As you kind of take a step back and we've spoken about this in the past, probably not a lot of debate at the valuation of the stock is probably not overly reflective of the growth in the business, are there other things you might consider whether it's changed to your capital allocation process or broader ownership of AllianceBernstein that could unlock shareholder value if C corp conversion is off the table?

Question: Alexander Blostein - Goldman Sachs & Co. - Analyst : Right, just share repurchases versus dividends.

Question: William Katz - TD Cowen - Analyst : Just coming back to the C corp discussion for a moment. Could you tell us what you're penciling out for dilution related to the taxes by simply say, roughly 10% hit, you're back to 11 multiple, which Alex's argument is in line despite differentiated storyline. So my broader question is, if you're unwilling to convert to a C corp, what is the appetite to potentially sell the franchise to unlock value?

Question: William Katz - TD Cowen - Analyst : Just as a follow-up, maybe to change the tone of the question. You mentioned that you're seeing a little bit better vibrancy in terms of the first month of new year. I know AUM would be out shortly. I was wondering if you could just give us a sense of how net volumes are trending maybe across the different distribution channels or the asset classes and within that, where do you think you are in terms of the runoff risk associated with the Institutional equity book?

Question: William Katz - TD Cowen - Analyst : Could I ask a third question?

Question: William Katz - TD Cowen - Analyst : Maybe it's a fourth question. I know it's a long queue. You mentioned, Seth, in your prepared comments about some investment spending, including possibly for new products and or teams. I'm wondering if you could just update us maybe what you're thinking about on the M&A side? And then for Jackie, you mentioned the guidance. And then you mentioned that markets go up. If markets were to go down, how much flex do you have on some of the fixed costs within the non-comp OpEx side?

Question: John Dunn - Evercore ISI - Analyst : You mentioned active ETFs have come up a couple of times. Like just maybe give us a flavor of how you're seeing those scale? And how big roster do you want that to be? And then maybe the profile of the investors you're marketing them to?

Question: John Dunn - Evercore ISI - Analyst : Makes sense. And then maybe extending from that, I think you guys said that there was a bunch of places outside the US that where US growth equities was thriving. You mentioned Japan. I think that's what most people associate with. Are there any other non-Japanese regions where that strategy is in demand? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 4:00PM, AB.N - Q4 2024 AllianceBernstein Holding LP Earnings Call

Question: Daniel Fannon - Jefferies LLC - Analyst : Just one question for me on Private Wealth. Obviously, a good year in the fourth quarter as you look at slide 9 and the breakdown of the revenues. But do you think prospectively and the investments you're making, how should we think about growth in this business? How in terms of getting new advisers, attracting new advisers, you mentioned even inorganic? So just curious about your thoughts around growth for this segment.

Question: Benjamin Budish - Barclays Capital - Analyst : Just one for me as well. Just curious on the Institutional side. You commented a little bit about the pipeline. Curious if you could share any color on sort of known upcoming redemptions deal wins, sort of things we should expect to impact in Q1? And more broadly for the year, what are your thoughts on sort of improving the overall redemption rate, which was a bit more challenged in the back half of the year versus the first?