AllianceBernstein Holding (AB) 22 Oct 202020 Q3 Earnings call transcript

Ladies and gentlemen thank you for standing by and welcome to the AllianceBernstein Third Quarter 2020 Earnings Review. At this time, all participants' lines are in a listen-only mode. After the remakes, there will be a question-and-answer session and I will give you instructions on how to ask questions at that time.

As a reminder, this conference is being recorded and will be available for replay for one week. I would now like to turn the conference over to the host for this call Head of Investor Relations for AB, Mr. Griffin. Mark ahead. go please Sir

Bernstein, posted and us Kate and www.alliancebernstein.com. prepared Finance will you, Carmen. third Ali join is of questions welcome our presentation everyone CEO; webcast of Burke, Relations Dibadj, our Good after remarks. XXXX CFO; earnings morning Seth that's slide quarter a call accompanied and the website, Strategy review. John Investor and section will Weisenseel, and to by Head Thank in This being for our and present our President our results. COO conference

today Some forward-looking of the information we'll and disclosure. subject present rules certain regulations regarding is SEC to and

to slide out presentation. our So, Safe Harbor point two I'd of language on like the

of this quarter filed questions You investment which in we Under our morning. of XX-Q the community can may public find the a third material Safe also XXXX only earlier our FD, Harbor Regulation forum. management language from address nature MD&A in

call. all ask please So such during this questions

to Now, it I'll over turn Seth.

morning. results that joining Good quarter All strength robust our across inflows by report consistent three another us pleased platform. to led Thank quarter today. delivered highlight third net We're for channels you annualized in of and equities active and delivering We growth active our posted retail net and of earnings X% for to AXA organic expanding unitholders. institutional. growth while distribution redemptions, both margins double-digit

markets saw The recovery equities both across financial fixed continued and third global a quarter in income. broad-based

quarter the -- Our credit fixed platform performance. retail long-term third improved, as good while funds in peers equities retained outperformed sectors our performed income

$XXX year under billion and AXA increased inflows represented billion assets fee or X% Firm-wide reflected on An $X.X X% flow channel growth previously rate. excluding X% from of quarter. In inflows the institutional. of Slide sequentially. the prior excluding X% trend inflows in increased shows quarterly Firm-wide average strength equities retail, net redemptions. AXA $XXX of by which of by billion five near strength by Quarter X% from net channel. a grew a in each overview four. we slide moderating Gross XX% annualized end ago, million, redemptions taxable year-over-year sales. $XXX were $X.X organically in were management growth XX% year-over-year starting billion net billion second low led sequentially effect than $X active organic by of driven Active and which X% and offsetting billion disclosed $XX.X levels. AUM continued of with $X.X our of inflows net quarter's up into get at grew moderating organically, income record billion specifics, from more fixed a Let's sales generated the firm-wide munis

gross in strong remained the bottom $X.X institutional billion. left shown As sales chart, at

gross billion Excluding up In redemptions, $X.X were $XXX inflows increased Wealth, the million of for we both sequentially slightly fixed across generated sales of balanced net Private and quarter. active income. and equities AXA we year-over-year XX% and active inflows net the generated

to Now, on let's performance turn investment slide six. beginning

quarter. Our multi-sector a fixed credit in funds from positioning risk third on benefited income

of In the and Morningstar AUM funds income follows portfolios of the funds of retail eight the the For by XX municipal AUM -- retail by XX top of in top the in top top in Morningstar with quartile our in top quarter the the quartile their ranked second retail group the top the top group. XX top in And were in peer out placed XXth taxable we This quarter, half. out our were peer the five percentile quarter, income fixed when fixed third decile. XX the six of of quartile. placed eight

short-term fund remain to strong is a period returns over X%, our one-year XXth by and impacted outperformed driven of of versus was over ability group. continues XX% assets our period outperformed fell outperformed emerging recent in one-year and XX% of important income governments. in outperformed. XXth the as up On the in industry over one-year which credit people, long-term three income We back up peer our period, the cap as stocks. as performance the period. diverse XX% In X%; proven QX. outperformed which top the the peer group at up underperformed while from markets underperformance past. Morningstar of equities, global recovery over percentile high -- declined which the remains QX XX% both European three-year XXth percentage U.S. basis, in High X.XXX%. Key record process, Growth X posting tech the and continued American X%; X%; and assets is a five-year that slightly approach. It's balance in the confident five-year Global noted outperformed Russell peers the narrow large governments, to was XXnd our Our and performance assets the of healthy be up still the to Yield returned most team's to below percentile. of In note have period. participants assets peer the by both high group quartile XXXX and corporates the portfolio the benchmark, outperforming most One-year Institutional mentioned the American growth strategies Since benefited megacap track large April In in nearly fixed outperforming which of excess income, we yield -- group XX% from sectors percentile; yield all

year-to-date Russell XXXX the driving the a September, in S&P all perspective, up record through Growth weighting. XX% XXX's For tech before and five tech were that these of representing stocks sell-off point XX% gains at of year-to-date August

management levels. equity the suggests core five adverse own these growth these we're While than high risk of lower in cap is our prudent names, strategies momentum risk active large megacap factor XX% and the to benchmark stocks weightings their which Fully chasing.

retail positioned income versus should equity and offshore concentrated relatively Slide good more eight In performance. majority we well performance. investment technology broadens the show seven leadership be slide insight in beyond these did market of our September, and As funds as it benchmarks. seven, fixed on retaining strategies provide

their Yield quartile High American driven taxable barbell Income since contributed security and risk for Global American credit. fund's to U.S. continue, assets In Among both March mentioned, funds, downturn. we peer the rally High retains by some allocation the periods, over positions rates performance five-year selection. have lower. the outperformed and as risk credit As the drip time-tested and have top three Income as letting quarter, Yield, taken structured gains did group significantly

an continued favorable and muni mid-grade show Our strong across overweight to sector funds the to benefiting credit from board, municipal performance selection.

in a three the strategies X. quartile are Among five for number of the offerings, top Moving to equities slide on and years. offshore

and by broadening fundamental staying high strategies position. to returns build U.S., have quality sustainable balance the equity companies research secular maintain to able market profitability capital growth. Our to attributes focused teams self-fund power. teams high growth drive These portfolios on hazards, our In ESG with shock should reinvestment competitive long-term other our out environment that with uncertain in and a future have growth by benefited can successfully are These sheets. their environment. performance better long-term high from investing continue short-term risk strong any return in clean diverse a today's manage command the and and that driven including on strong to a side sources proven saddled our companies In in investing quality of companies premium are portfolio's, through ratings, come in absorbers

top nine generated That asset fund AB comparisons. active equity X% beginning placing the in Moving very equity We and of were inflows. U.S. that chart active on Cap straight quarters growth, with in sustainable was consistent out led X. Once strong to Inflows organic slide XXX eighth thematic. classes our year XXth against in flows. last following shows channels of backdrop. billion normalized improved a sales net for channel prior $XXX has from on the by U.S. equity of The ranked Large of our Gross net managers. quarter, Retail again, by client challenging global Retail million, of benefited Growth our the flows positive XXth brought $XX.X in delivered industry quarter the balance left-hand inflows

billion diverse products than scaled with Retail classes. $X asset across offerings remain Our XX balanced more of

the bottom net rankings. excellent these have number in flow a shown As of right,

triple $X.X than equity billion generated global cap, I'll in Now, net Gross in the of billion nearly and Equity This In active inflows sales were We prior the quarters. $X.X billion XX represented active seven led in third net XXth XX. international sales last our of greater by quarter have flows the equity sequentially. six the growth organically. XX% on which that slide redemption. Institutional of of accelerated low discuss Active rate. to billion were growth. annualized concentrated of of $X inflows we organic a slightly quarter, the last down small AXA excluding were and was fee grown equities quarters $X.X core have

was billion in pipeline a equity strategies, billion funded other strategies mandate. we've customized Institutional and with quarter. can't enough. in been has clients, be returns deliver additions with pipeline that or billion Australian $X.X to step in offer quarter equity. quarter that in Our $XX.X in lifetime isn't of our including core and replicated end, back, income our betas Taking include the idiosyncratic was $X.X concentrated billion $XXX the Notable $X.X strategies pipeline billion by global explicit investment a additions at that factors $X million retirement $XXX resonated million that but alone goal in

we network our to two owners. for upgrades and this in global Eurozone of select equities, cultivated and received sustainable. asset long/short equity consultants In addition quarter, consultant global core, we've Additionally, five

our Sustainable year-to-date. billion manage in we responsible new in in real expand these We funds Equities is as XXXX ESG, Volatility increase while by markets, platform sizable Managed our business they named pleased a -- and leveraging substantial including Europe, strategies been Week increase with & their our to including Green up seen as strategy debt client planned We're $XX ESG investment Thematic to we've with Investment now related portfolios Additionally, for Thematic, AUM alternatives. purpose. Awards, of launched ESG-focused to recently Global nearly were for stated an Investment also a requests Global have estate in Equitable including the XX% to RFPs partner This finalists Equitable. U.S. from our commercial in equities, alternatives Sustainable these have commitment Sustainable Four seek our Institutional Credit. relationship part strong of yield-enhancing

sales see hardening increased funding. by relatively some business Moving stabilized. million the Clients signs transactions net up Redemptions are were adverse sequentially. quarter. inflows to client to slide on billion remain still We a though Wealth that $X.X and was it year-over-year $XXX in outflows X% to improved growing as XX. in Management Private risk of Gross of XX% of generated precursor

traction seeing Bernstein we're Our online with The focused and XX% continues on client engagement virtual continue Muni across to emphasize up Insights our downloads client to efforts grow. Network. Portfolios engagement events unique Impact

grown Now in ESG strategies billion. $XXX million have to AUM, while $X.X

share AUM Research in. equity and XX% to sequentially. A down pleased portfolio validating year-over-year volumes due trading I'll business XX. significant higher the Asian managed of experienced was our to not participate volume this XX% separately which growth, Retail earlier including overview up continues loss to proprietary Our market scale post that growth X% revenues We Institutional India trading finish continues sell strong were harvesting business does this our U.S. year-over-year quarter side our investments. Bernstein slide on with with slowing quarter. Bernstein down with

over X,XXX to Institutional published leveraging bottoms-up XXX ESG across XX and Decisions and on virtually an buy-side the investors identify report had firms. issues stocks. this integrated ESG for XXX Our CEOs expertise We quarter our sector sectors over conference and Strategic senior European well initiated research critical sectors presenting from four global executives'

our are flow leadership on capitalization multiple of pre-IPO including Highlights research XX% experienced We outperforming three quartile styles, of our geographic categories. some XX. our strong third accomplishments assets also by slide are years, over and enabled of and XX conflict-free top quarter research across of platform. funds shown equity

and organically in all inflows led Our This by Institutional equity respectively. differentiated Retail which client return XX% growth active and the channels is streams across continue drove net we clients grew three to by quarter. as resonate with X% across

strong remains the of Our over very with alternatives. Institutional base pipeline fee comprised XX% of

multi-asset We strategies to six our seeding multi XXXX. and grow alternatives multi-asset as continue offerings in evidenced by

double-digits results distributions earnings our bottom benefiting management, grew by expense strong which quarter. line we Importantly, is show and as this our

partner decided as Ali February. will Finally, has AB earlier this has leadership. role Weisenseel Strategy, and who quarter. tenure in transitioning grateful is in his assume to we're AB walk recent Head in Finance John over and Ali of his for the John CFO, responsibilities strong this John effective financials XXXX. his will a from retire currently CFO the through announced to nine-year Dibadj, and to early our me quarter been to years us

Seth. Thanks,

income statement with let's start slide the XX. So GAAP on

Third period. increased quarter $X.XX million quarter of GAAP up was year the margin points. compared of GAAP income $XXX $XXX increased XX.X% to basis prior revenues up Operating XX%. net X% from X% of XXXX operating EPU $X.XX in and the million the third of XXX

As in we certain our that adjusted results. past, substitute provide considered our which as the adjusted from of not our base We to items we've remarks business. results, and of our done addition to here focus effect operating in are core which results, the for our GAAP unitholders on part we'll remove not upon distribution a

results presentation are reporting Our in press our and XX-Q. release standard GAAP and to appendix GAAP of reconciliation adjusted

slide on included Our XX. adjusted highlights financial are

operating basis the second income of in operating million, servicing of X% income revenues. statement delve increased this driven to on base XX.X% just by slide for Beginning more to XXX quarter, adjusted G&A increased increased XX% year's $X.XX and growth by compared points, expense of and to detail We and Compared results. promotion margin revenues X% by distribute drove year's operating third increased our XXX due with earn unitholders improved quarter and X%; We our million our per strong margins. $XXX items expenses, operating While will promotion unit lower fees $XXX reflecting expenses. on into XX. servicing quarter. these compensation income and on third by basis $X.XX revenues higher were incremental Lower points increased flat primarily to margin year-on-year of last

revenues million year-on-year. net quarter $XXX of Third were flat

average increased points quarter rate year-on-year. X.X%. calculated total fee by income fixed a increased points from AUM basis net Lower reflecting AUM discussed. portfolio drove partially rates Third higher fees higher channels of on decreased same portfolio fees distribution XXXX AUM decrease, quarter. earned fees base quarter third the increased discussed various fee first X% the fees from of by the with which last X% the year recall prior with basis quarter, last essentially lower rate. X% we mix offset all you Compared may on fee the equity period portfolio across products quarter of The second flat base and average XX.X average to X.X we Sequentially, as

for year-on-year fees Third Arya growth down offset quarter global $X lower were lending our and were from as portfolio market of middle long/short performance partially strategies concentrated million by million $X fees manager performance fees higher our multi strategy.

$XX Bernstein same of earned of to of growth Third Europe. partially by losses Europe trading compared prior year due Other our quarter Services decreased the interest million million interest in year-on-year, period, seed Asia. revenues U.S. and XX% in lower the for on period decreased on million client because losses prior Interest hand trading Revenues the offset lower rates. and of million X% interest and resulted decreased resulting revenues in client $XX to other Investment investment and investments. the $XX to decreased reduced sequentially gains. in to $X compared year U.S. from Research million portfolio due lower on due balances, gains activity our robust paid from lower dividends volumes year-on-year $X to and broker-dealer lower on broker-dealer customer broker-dealer expense investment the

$XXX Moving servicing million, third compensation our lower to to adjusted expense total decreased lower and expenses due promotion ratio now. expenses. a quarter All operating in, year-on-year and of X%

million savings and occupancy totaled to million $X $X income. third $X of a corporate resulting the in quarter, expense net The a our estimated $X increased $X net increase headquarters transition Nashville million compared in of is in million compensation to $X million operating million savings costs relocation, For costs. related savings

expenses of For $XX for the fringe and quarter the $X expense million million in revenues compensation net benefits and net costs compensation XX% accrued compared increased of million quarter. versus operating XXXX of on Total quarter year year-on-year The a nine-month third estimated at benefit $X million in adjusted $XX totaled the X% year-to-date net reduction both million of employment to is and We occupancy this expense savings. second year the period transition decreased of costs in a lower XX.X% of resulting $X and compensation costs savings million income. other $X commissions. prior

to expect our headquarters quarter this of the revenue, do comp the revisit XX.X%. typically we do requirements compensation transition relocation. we ratio full As clarity adjust If we at and time relating costs current for fourth to not gain conditions to plan year, the the and to business, we market comp that year's corporate persist, ratio exceed accordingly our as further as our

servicing period, Third versus from XX% and due to resulting promotion restriction. COVID-XX year decreased firm prior the travel T&E meetings quarter same continued lower

foreign due G&A Third on increased miscellaneous increased taxes to exchange and quarter year-on-year X% translation. unfavorable

included In which fees not will the addition, launched. be incurred G&A legal write-off one-time of for products,

would legal increased X% Excluding have year-on-year. than these one-time by fees, less G&A

quarter million X%, the declined combined Operating on high X% expenses increased margin. a by in by targeted continued X% reflecting sequentially, in as primarily from our prior increase managing base expenses to increase with year expense. strong income operating our a increased income delivering of XX% Third operating $XXX focus fees minimal incremental due and

XXX XXX Third and basis sequentially. margin points basis XX.X% quarter of points operating year-on-year increased

GAAP in which income. EPU that noticed than were adjusted the impairments, have and but operating amortized over reflected GAAP space financial results terms be our EPU income GAAP the previous office and in was million below recorded reflects lease financial as earned primarily our may You quarter our third $X.XX This operating our must lower remaining quarters, $X adjusted results. lease

versus X.X% mix anticipate a that full lower was rate foreign pre-tax than effective XXXX higher quarter effective for the domestic versus third We L.P. year of to expected, AllianceBernstein earnings. The tax current reflecting domestic from pre-tax of planned based upon range headquarters earnings. X.X% I'll relocation our X% update an tax Nashville. rate on our forecast finish with foreign to corporate will

We corporate moving next to for approximately continue headquarters employees XXXX to our building into which begin be prior of quarter XXXX. new the $X.XX reduction $X.XX due EPU of and year. We than original currently to our estimate less in expect the guidance the anticipate second to relocation $X.XX is during our

accretion thereafter. to to in be last will XXXX for a and project related EPU each slight EPU our with continue year dilution We expect in beginning increase of year our EP headquarters relocation that XXXX

Our estimate beginning to to is transition $XX With XXXX million it over once period and of is expected is ongoing from back the annual unchanged expense Seth. I'll to savings range year. in turn per $XX million that

you, Ali. Thank

to Turning slide XX.

You might unitholders. return the We'll articulating of to reasons test some we invest more recall last to with AllianceBernstein. progress to quarter, the on slide began in behalf directly frequency our

quarter execute dimensions along This we continue we following that outlined. the to

organic X% AXA Firstly, we growth drove annualized based outflows active investment differentiated performance. ex on

recently continued less Debt European of expanded onetime launched mutual in fee We suite business with expand longer-dated enhancing G&A of alternatives Real our to year-over-year plans X% yield strategies. margins which sequentially fees. our to a alternative support than We of another interest legal our Commercial up through Equitable and write-off higher example strong drove Estate growing the excluding

to questions. take lines your of approximately to these low our partnership, X% low in a the a income supporting forward tax along environment. to we continue rate pay future. to XXX% yield report rate and durably distribution benefit pleased With our that of robust we we're look progress continuing We continue to in As a adjusted from

Instructions] [Operator company. Please your will And first question ahead your you Siegenthaler. with come announce your from Thank and Craig question go

fixed I start morning, wanted Good everyone. on Thanks. income. to

either or private a across return seeing low for pressure client how rates today bond your business net and depressed income, So your the in are in just given fixed business? fee rise in you are prospects

say Thanks And question. business. past. And that have business seeing for -- we Hi, Craig. in I Seth. retail certainly Haven't continues. But retail business the in the a I wouldn't impacted talked about unexpected. investment-grade particularly pressure quarter. think the long in -- mean We've in the we've the the the I It's anything private the for us the seen time in in pressure been there that seen business. that has pressure third some That client institutional

just I it's your the that right. time. trend a point think But industry I will continuation some been the of It think for along we've continue. with experiencing is

in despite you in a think most to now but But strong where active bond you've then saw may rates a how fixed your point other March I pickup Do reset yields And And are? just peers start very we stall like this given been have know at low April. seen that not? into in we're of migration and income. large areas a equity, there's a

think Look are I remain people adverse. risk

There's and But I the they -- think I be our central even into investors really income can resonates with continues equities. pushing the think both in so there's least at retail banks more go. in think I that that to institutional ultimately, theme are experience nowhere and else continues. people

that I the net is think result of this.

And reverse concern marketplace. your because so could begin justify fixed in to and income zero-bounded that define a of role ultimately the to is I share harder this

Thank you, Seth.

Your line come Robert next from question Lee. of will the

been But KBW. you. a expectations seeing for down? of business the income and possible. guys been little have what sense particularly get good. you I mean Asia what which in flows you're or has point drill could I in in strong guess into seeing maybe a you're your just you quarter a there? trying to kind seeing How it Thank a the equity while. flows obviously Hi. I of APAC break fixed demand-wise you're down for retail bit Can if If

sorry quarter It's I'm certainly in fixed and slowed continuing. Hi, see that trend third we Rob. Seth. flows income the Equity in Asia have --

obviously risen. strong been been question equity And yields were think the rates in I lower have the story things. markets I Craig's attention. and prices talking question, also that market. as really that think just prior Chinese we diverted has think a have falling I that the as of the local two is particularly that have One, yield is important

there. those wholesale it's There's So any year this have But doors. see interest. We positive run seen last We flows. yes, for level think earlier impacts not are not the year. certainly had of still certainly we at continuing the seen I both or

maybe follow-up asking M&A. about then won't able a call through asking with you Great. as And without probably -- to quarter someone my be get

I recent about guess within with AB? all I us could just consolidation chatter your the And see scale probably guess where but thoughts talk I'll AB and kind your maybe how on So your update kind -- trend in that? of that ask response, it. viewpoints on you fitting you you of

it's Ali. Hey, Sure. I'll take that.

So, I'd obviously, of there's been we're a lot on lot is, I One much activity. the of this. activity of and guess. very there's anticipated in things, information three a say flow

You can things, We imagine, of come way. we see et pitch lot things cetera. a our can

more we're there not even the sense past. so, going corner in of was surprised around And and very might had a be on that much activity what the

at thing we've as history. second own industry's we say I'd as the history The they've it -- look looked is, combined, as our and at

that acquisitions that M&A to We we've that is the probability riddled on. is In major philosophy with large going cost-cutting frankly far. about of and seen our M&A, words, creation and over the vector the And so that over other right? examples the of is, are to value sense low, that actually some quite make went is of has challenged work if market again and

much M&A we've we've of broadly view about that seen, the far. seen our that so the that's M&A So,

as of we where it's point a talent, interesting, is them as that recent at clients. finding we M&A, growth given on bring sense. number look track the have broadly three, record, value, we great cultural we find what way same actually add can can the Stanley bring discipline, surgically makes can Where ones. actually is teams serve strength an of and the view, for distribution but most our teams best But example, good that Some is speaking not most story. our But a areas that's cost-cutting quite Morgan grow. and And we on where investment it's story, our we a fit event

M&A our that's philosophy. So

questions. taking you for my Thank Great.

of the Carrier. from your Mike And ahead. question line go next Please is

Hi. the questions. Good morning. And thanks taking for

that slipped First, year. wanted realizing but importantly off, it fixed mentioned confirm can be think the I or solid one been chart pipeline income. just fairly on looks fixing in I'm good. sounds I'm And the Income. clarify wanted quarters performance like flows favorable to you just have was income bit below, performance. a XQ that. the on then like to seems I American rolling on bit But It and more strong a

weaker investment Just is an conversations have clients. the wondering short-term starting if performance impact to much or of on

remain three the stronger focused record? You on five-year track and

Mike, Hey, Seth. it's

clarify just thing. me Let one

Your question or around flows income or both? fixed flows, is equity

performance basically a up seems but overall just looks little but like you active this weaker, the been It's guys not XQ just good it both, bit quarter, like the on side, still flows. have putting

it's like So impact. seem a more doesn't coming it having just big conversations more. it's But curious, if up in

the flows. the is that indicators or And recognize performance of key leading on indicator we won't. doesn't one that but mean It isn't it yet, leading

are you the I well and think it of change as what the clients do take equity weren't I guys really one case we growth, understand we So large as as that think a narrow really that cap markets seriously. in triggered we equity which It's story year, in just do. the know story the that on is as quite is how And the concentrated really just the about benchmark. remarkable. significance

done a persist bit we've that. of out as Now a quite in there, in we It been but retracement well. a performance while. has saw we And that a gained consequence September, for could the

it the flows American behavior seen has income as that particularly been of has strategy consequence we that respect but of or yet. think, it, out I a yield there. uniqueness watching any we're adverse So that With the to and But it's haven't in fixed offered compelling. clients look, income,

Asia the of the performs. and know particular in comfortable familiar with and and portfolio risk-on, nature Our clients well risk-off are team this how markets in

flows, it future, since continue in so gaining the overall mean, is flows foretell the been will gain we could and overall it but But, far. I to it it's watch performance that we're March. So hasn't hopeful again. slower. performance But altitude has been lower so and it market And the performance

Right.

trends, on positioning. to see then and Makes closed areas flow your are about some And you drive the sense. event. update positive wanted or an And Okay. areas thinking if given guys in invest to longer-term performance favorable additional just you get some just invest it's how to whether in opportunity, distribution of

as have foremost, I a money us. glad are and will in for process being able That that capabilities management and in our up from start We an ultimately I'm to in asked fixed think we of to hope to presence into know, first with onshore as our investing, we moving that that that look, income lot forward equity. bring think doing to and you our is distribution, China building more investors benefit opens now, global you regulators. is Chinese question, we're but Well, that Shanghai in onshore both a and

channel. continue hands base. that's And so our we I here see. in investing adding we And United so Retail beyond think why doing that look and to doing are down we the is aggressively are at biggest our States and at are continuing want we to the we're there. to that opportunity But client business expand what private in

to I've margin, little been focus continue the emphasis China the on look, bit albeit, in Europe. where is, and think, is our been I us it's a resources, we in a continuing here. since So but for And investment add slowly, U.S.

Thanks Okay. a lot.

line Dunn. the of with ahead from your question. comes John question go Please next Your

it of past any pipeline. the funding coming to has give around the over just year? Maybe the coming you the you're Any getting is changes pipeline? color demand from, from existing customers, on or customers? the ISI. mechanics changed new times where just is Evercore could Any And

third additions quarter. Sure. in And pipeline a of $X.X had the Thank the it changes we bit. you. always billion -- Look,

is Secure the have, of is, tends we I seeing retirement the we're and think passage interest different with considerably what in DC big more to now customized be plans. Act that

that. lower And of disproportionate, We they're those, so see to they size given be the tend fee. also

client introduces that like We fee. other also ways firms, forth. seen and also Cash don't investment that tends both some to Australia. new pipeline. cash. intermediated. degree continued grade, In number the us so large some to but sorry We to volatility has Europe, consultant door firm equities, of in both a interestingly have back is here have most opener fixed a the of and moving cases And be been to and And we've in large in cash therefore, and lower but a very be to -- income it's that business seen clients I'm for some our is

But base. in And the for when investors space is alternative estate real to for so lending, market periodically, debt yielding And to from raising has back us. commercial been others, institutional the and they we it's as are their And that investor existing or go really their looking tend who mostly continue for well. to insurers higher add original middle or fund positive assets. that

order objective? a And years? real next then, you. maybe on what few estate differ Maybe U.S.? business, Thank little the more this maybe And look kind how European, commercial over does of might potentially then, that the the from what the like, region

Ali why well want take advantage we -- to don't Well, question? answer the -- you we

problem. no No, Okay.

commercial the we're thing. think for One of say, question debt us Thanks pleased this we're us the Europe. main of bit for a estate a it's our a and roughly business strong going classic our debt for reasons. we knowledge to to Look, real there. is And I couple lift able from region have commercial business. and our have one capabilities. in estate Obviously example base being launched the a other. shift It's really to of probably real U.S. very little important frankly to same brand

And shows for something to very ability on so the expand Europe and those. launching this us important that's is in to us

base Seth that improving great remarks Equitable, in very their stated quite U.S. questions do and as thing And ties strategy, it second much and ties to the scales to mentioned prepared we it your to publicly geographically have more in commitment a that. in core The there's expand this from think to his we planned it believe a like of is their opportunities in way this, what their to well. do good is this alts We improving importantly this showed that yield, from returns,

Thanks much. Got it. very

is go question line your of Lee. with ahead next the Your Robert from question. Please

Great. my taking for follow-ups. Thanks

things it and tracking SMA Tax-Loss that curious, Morgan these that arguably, Private just and called brand. out the Wealth of maybe Harvesting I mean I'm business your one similarly So Stanley you the business something AB in

there of a was to that my plans kind That out could about, than more little are bit roll So capability retail? talk broadly you question.

and Burke Private is strategy in we to certainly from leverage the in standpoint, that area business. really a Wealth SMA product attractive look We very it's Wealth to out I building looking Hi we product our business, that we And success another Look, in our much channel has here. form. a us here. work strategy a channels seen that do from for across that what focus how Kate leverage to a think you've what and continue can that, Private overall one been tax of of are is perspective

going see in And to the that way channel. if leverage continue so to for we're Retail to there's also opportunities a to look

mean given Seth Great. If guys peers, could you relative maybe generally, I'm is been you demand? just be coming like -- have your -- to maybe and may more I more thing. quarters, key know I capacity always have constraints some just over a to long-term capacity just one good if I limitations the I you think you sensitive good where strategies which curious, any strategies approaching feel follow-up, I just mean

It's Seth.

we answer mid-cap me Let Well small capacity space. in that. are obviously monitoring and always

given most flows having. limits. the In of level likely near capacity room it future, and any areas, And stuff. that we're think do some we that have us sufficient have so cap the of be time the We closer that larger would in be shouldn't the impacting is we

my taking for you Thank follow-ups. Great.

you. from line next is Thank And your Bill the of Katz. question

taking for questions. much my very you Thank Okay.

quickly. on lines terms went just rather talk Just cumulative are consultant wondering just the my of maybe the some maybe there? technical I difficulties across and could through about that the opportunity in end, five back you product step you upgrades, was if just

and our broader sustainable community. Eurozone two on get demand to that for they got support consultant been for there's Seth. upgrades have it service. slower. is We lead its upgrade for from global and upgrade I very significant I hard an our -- an have The upgrade We we an quickly And core, I had equity, over should maybe Bill Hi Yeah, think select long strategy. short on for the It's Look, opportunity, refocusing as when yes. those and spaces. our think start time growth

episodic. so tends it And be to

seen And a -- So the States companies sustainable a strategy of to a evaluate institutions lens they think lot focus. more we've United for had consultant and a was of interest ESG sponsored. United is that appeal core to in. it's invest in where global important lot well. they We our States, the of the utilize outside they particularly a and adaptable now example, And lot for that's

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Great.

taking for Ali some maybe a morning, and questions comp. you gave thanks the fourth for follow-up my just And guidance Okay. for quarter this

past What would the some this higher to the might of years quick what ratio in some what maybe in key than a might be be? quarter. terms within the bit what thinking variables the -- range Just your of that seems sort no little than of was about drivers that, sort for be recollection, of more a to of the of fourth think for couple of be XX%? How

a for point. isn't year comp the thanks where in XX% full an down the took quarter year. Remember, than what we absolute the guess, question. in higher started we fourth when delivered started we the in I from the at least term So, past, we this ratio by

at than the down that seen have we And more have past. a to that's as efficient the by in just to ratchet done little more level a over so context So across much you've time best started lower we question. that bit just being our done we board,

but If magic as market to above as about But is going go my the good quarter the XX%. ball For today could specifically, view your next we will couple is magic where are variable eight the think happen probably the we eight ball fourth of the is don't over big what frankly quarters. markets.

And market. make comp we to going appropriately want we context that our making careful are at talent ratio in just the be for in very about sure that of what's to provide we firm volatile sure so and prudent to the probably a be the

you. Okay. Thank

the Go your is Alex next question of question. from Your with line Blostein. ahead

your for point And was some They management recent Thanks. have expand that talk could like Thanks. with Equitable well sort you yield Hey investment kind guess. of with relationship guys that other just asset the to I morning. is are like lastly, companies made with some at set partnerships? that? guys hoping bigger rates and that good like there insurance of dynamic obviously out insurance Equitable. a what fee the could sort their I management and agreement within you other work you time a you What seen I you a bit on little improve provide Great, little respect we've see guess stated of of commentary fit assets with almost of yourself? a policy the opportunity with bit trying But on many to like strategies can about you

and for debt thanks with private Look question. focus real been hand-in-hand And business the building business our Alex, commercial our we've lending with estate middle we Equitable. now our initially alternatives with AXA business. market

the AB we for in need and them do sponsorship evaluate business. planning they work separately we're strategically although to from have products them for get what them those XX% earnings private areas AB's capabilities. process support about Equitable and of Equitable holding deploy we we the interest way because that additional commercial for it's will closely with that currently and the their lines general partnership build But review the and growth in Equitable of the And is configured from we within benefits with out their and -- unitholders ultimate clearly XX-plus We with those agenda other appropriateness and timing and new the the European money build very us out understanding credit improvement of with continuing of to it real actually have We are to our ownership. its of through look same it -- as and higher interesting units estate may and of ultimately an the shareholders work businesses respectively. policyholders with that In account. AB's amount to our Equitable helping the feed should think

coordination So the alignment quite interactive. is that between strong is firms think we natural. quite And I the think pretty and

our growth we it's plank important strategy. So an in think

question question. next your the from is go with Please Your line Dan Fannon. of ahead

morning. good Thanks,

Just the what point retail be the you Can wanted I think kind about are and there, we mix to how forward? should overall quarter. the guess behind the the And the on rate in in about the factors kind fee talk some soft outlook seems and of follow-up the going fee to of context of are rate that?

Sure. Thanks Dan.

about bit talk let's to So just it a fee color. little you the rate and some extra aggregate give

of look right? pressure board across lifetime we emphasizing in Retail, of flat a the perspective of very some of alternatives, really we majority the happen billion you some pretty is to right mentioned worth and fee quarter your that fee piece a in which So now as the guess that Retail fee pipeline, remarks a effectively Broadly yes to product last the to year-on-year one of it, quarter-on-quarter channel disclosed mentioned so around broadly quarter. $X.X we're mandates. saw to net-net But we mandates. getting happened in has rates talked is remind about right? same That lower moving our Lots of just that that The actually what as essentially and Seth equities remarkable points. was basis about high a talked a they portion of earlier of a nature meaningfully effect. seeing it's issues themes of mix mean we year-on-year are and broadly this though fixed that year-on-year income relative to getting what's So basis yes is mandates was it. some it X.X as some the very well. say by largest at from value the we're thing right? equity quarter And you'll nothing stuff the essentially shift right Seth down it's last last wealth pipeline a before. same on same. dispersion But we it you is we you on answered XXX chunky the AUM that you're last his the that specially last flat. essentially pressure But that's on But are Institutional one basis. forward year-on-year idea the that quarter quarter The about some is some that broad what the income We're channel this I'd little active the we'd is and saw really but second our obviously. parts are much quarter. a leads on is So year-on-year. on And going just rates. the about AUM And this that seeing speaking equities change basis value look some lower saw So point that so bit, and We're just but CRS We of well. in as the side moving prepared basis if change in private some see question there the monthly anticipate. and those strategy underlining Institutional more the just talked big these around announcements of on worth And fee I question a of I

grinding larger within and volatility might not So happens that's may dispersion to exactly bit fun these pipeline What rate before higher, the right? mandate higher, the time, higher dollar be a that lower could something thesis the fortunate as grinding fee the They be rate big. same have happen a more quarter-to-quarter. an quarter-to-quarter will been. be we're to although x same grinding of in that As you And have fee quite but over it's slightly is linearly lower to billion as rate. some is rate. But volatile it it's It is little again, But the the means be fee right? thesis fee in. mandates be come

That's for certain about to about year kind And, about I'm trajectories just a we kind I for normalization sure to just kind some items thinking XXXX Thank of be thinking of of process, you. and you're but what helpful. of line spending expense get thinking early. for it's the those sense should return discretionary items? how in budgeting next of guess, still you're trying

process right, that So now. we're going you're through right

more some our servicing broadly certainly of of expenses at is bit a Ben you T&E, down will own world your for a right? The If Comp and can lot But in is couple help this going sake if you on, that you back our hope so think quarters seen gets to for and us you've level. think of certainly lot the travel focused for a promotion servicing, of past about them, flow give right? the as quarter was know going and that look that own we a disaggregate look for and that forward. example, that of about Nashville imagine our some hope little -- travel So we're So and schedule the on which a the and pretty into driver of at drop right? big that going to big -- is right? G&A, everybody's travel example year. So as far promo schedule, and you for obviously, the and normalized

the looking back opportunities a however, as the really same level not we through We're in are, what to think are. say trying We whole. for to XXXX as were necessarily go to opportunities

hope there'll hopefully G&A and is onetime with bit charge-offs the on be quarter-on-quarter slightly adjust it's accordingly, at. promo in of right? same, line have to back normal virtual because and say, clear, We learnings permanency. trying we're that but past they much can clients that to it in something forward. be going all T&E this And and sure we instance, careful do down that inflation want year, we past well. very, up again, a be that this below. always like which For G&A but more is the you've this much as go conferences might try are normal in the do not what's you if go be servicing things much we very less see we'll year, All not year and right from next we'll that as wait want some And you seen To our and within On guidance area. that go the what happened to is expect we savings keep now. the very see Remember to bound being of than to it to the the X% exclude X% growth, that is some were more for little quarter. these I'm with as don't

hopefully a little it about So bit gives think color it going you more we forward. as

Sure. Thank you.

now And for further questions remarks. call there I'll Mr. the no back Griffin time. this closing at are hand to any

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