trending Market Intelligence /marketintelligence/en/news-insights/trending/UDgbbKMJwoqYYfqbU2JNyA2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

AllianceBernstein CEO expects 'passive-active battle' to continue

Banking Essentials Newsletter - November Edition

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery

StreetTalk – Episode 70: Banks' Liquidity Conundrum Could Fuel M&A Activity


AllianceBernstein CEO expects 'passive-active battle' to continue

The environment for activeequities in the U.S. is getting increasingly challenging and Chairmanand CEO Peter Kraus does not believe it will get any better.

"I don't think anybody is missing the fact that theflows in the U.S. equity market for the industry have been really challengingvis-à-vis passive. And I personally don't expect that to change," Kraus said on a conference call to discuss first-quarterearnings.

In response to an analyst's question as to what, given thevolatility in the equity market, it will take for that business to get topositive flows, Kraus said admitted it will be atough slog.

"I think that our job has been to both produceperformance and to produce performance in products that are demonstrablydifferent than what you can buy in passive," he said. "And I think ifwe do that, we'll end up with positive flows. But I think that takes time."

Another analyst asked for Kraus'view on the investor shift from active managers toward passively managedstrategies.

"I think the passive-active battle is going tocontinue," he said. "I think investors have concluded so far that theway they experience active manager in the last 20 years has been unproductivefor them."

Kraus said investors haveevaluated active manager by a package. They hire a number of active managersand see their collective performance and, in the process, investors do not findpositive results as the portfolios are over-diversified.

AllianceBernstein returned topositive net flow territory in the first quarter with $2.2 billion in netinflows, due largely to redemption levels that were at or near multiyear lows.This compared to net outflows of $2.5 billion in the linked quarter and netinflows of $6.0 billion in the prior-year quarter.

AllianceBernstein LP recorded net income attributable to unit holders of $168.9 million, upfrom $141.5 million in the year-ago quarter.

Net income for the quarter was$163.2 million, compared to $142.7 million in the year-ago quarter.

Adjusted net income was $124.9million, or 40 cents per share, down from $141.2 million, or 45 cents pershare, in the year-ago period.

The S&P Capital IQ consensusnormalized EPS estimate for the quarter was 42 cents.

On a GAAP basis, AllianceBernstein Holding reportedfirst-quarter net income of $55.5 million, or 56 cents per unit, compared to$45.6 million, or 45 cents per unit, in the year-ago period.

Total assets under management asof March 31 were $479.0 billion, up from $467.4 billion at Dec. 31, 2015, butdown from $485.9 billion as of March 31, 2015.