Release Date: July 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AllianceBernstein Holding LP AB achieved a record level of assets under management (AUM), exceeding $905 billion, driven by market appreciation and strategic initiatives.
- The company returned to positive organic growth with firm-wide net flows of nearly $800 million, marking the strongest sales quarter in five years.
- AB reached its objective of $90 billion to $100 billion in private markets AUM more than a year ahead of its 2027 commitment.
- The firm's active ETF platform has grown significantly, with assets increasing 73% organically over the past year, reaching an annualized run rate of approximately $100 million in management fees.
- AB's adjusted earnings for the second quarter of 2026 were $0.82 per unit, representing an 8% increase year-over-year, with distributions growing uniformly with earnings per unit.
Negative Points
- Active equity outflows were nearly $11 billion, and taxable fixed income outflows exceeded $4 billion, primarily driven by retail redemptions in Asia Pacific.
- The company's equity performance struggled, with only 23%, 28%, and 31% of equity AUM outperforming over the one, three, and five-year periods, respectively.
- The fee rate was negatively affected by the timing of onboarding a $9 billion passive fixed income mandate, creating a temporary disconnect between asset growth and revenue realization.
- Despite strong sales momentum, active equity outflows persisted, driven by US large-cap growth redemptions across the US and Japan.
- The private markets performance fee guidance was reduced due to unrealized marks in the portfolio and tax events at the investor level.
Q & A Highlights
Q: Can you update us on your ability to manage more of Corebridge's general accounts, specifically, could they be one day manage the whole $200 billion?
A: Onur Erzan, President: The Equitable Corebridge merger represents a significant AUM opportunity for AllianceBernstein. We expect $100 billion of AUM post-transaction over a couple of years, from both general and separate account assets. The combined general account assets will be around $350 billion, with separate account assets around $200 billion. Despite other managers, we see significant upside in growing our share of this AUM.
Q: How have overall appetite and allocations for U.S. assets trended across Asia amid geopolitical tensions?
A: Onur Erzan, President: Demand for U.S. taxable fixed income has been less strong due to geopolitical tensions and local market alternatives. However, we've seen growth in multi-asset products and international strategies. Institutional demand for fixed income remains robust, and there's been some uptick in hedge fund strategies in the region.
Q: What are you seeing in terms of competition for third-party financial advisers in the private client sector?
A: Onur Erzan, President: Our private wealth business remains resilient, with adviser productivity increasing and headcount up 4% since the end of 2025. Alternatives are approaching 10% of AUM, with potential to grow to mid-teens. We continue to innovate with new products, attracting more assets and clients.
Q: Can you unpack the decline in private market performance fee opportunities?
A: Tom Simeone, Chief Accounting Officer: The decline is due to unrealized marks in the portfolio and tax events at the investor level. These are not related to credit events but are adjustments made by third-party portfolio evaluations.
Q: How do you view the interplay between fee dynamics and profitability over time, especially with corporate assets coming on board?
A: Onur Erzan, President: We expect robust profitability from incremental AUM, potentially in line with or better than current margins. Fee rates and margins are separate metrics; lower fee asset classes can still be highly profitable. We anticipate significant potential from core fixed income assets, which may impact fee rates but not margins.
Q: What are your thoughts on the Treasury Department's focus on tax-advantaged investments?
A: Onur Erzan, President: Our exposure to high-risk categories is minimal. The Treasury's focus is not on broader tax-aware investing or tax loss harvesting strategies, which form the majority of our assets. Our exposure to targeted categories is very small, so we don't see material risk to our business.
Q: How do you define scale for newer strategies, and what is a reasonable time frame to achieve it?
A: Onur Erzan, President: Scale is product-specific, but historically, AUM growth has translated into higher margins. We focus on overall margin targets, with potential upside from large categories like Munis and institutional fixed income. We expect 20-30% of new assets to come online in 2027, accelerating into 2028.
Q: Can you discuss areas of investment and where you're seeing savings in expenses?
A: Tom Simeone, Chief Accounting Officer: We're investing in private markets, ETFs, insurance, and expanding our adviser base. Savings are coming from non-controllable comp expenses, promotion, and servicing. We've reduced our expense guidance by $5-10 million and continue to look for efficiencies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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