Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Investor Day (November 2012)
43 slides from Alliancebernstein Holding L.p's investor day presentation, Nov 7, 2012
Slide 1: AllianceBernstein: Investing for a Future of Growth
November 7, 2012 AllianceBernstein: Investing for a Future of Growth AXA Investor Relations Day – Paris, France John Weisenseel Chief Financial Officer AllianceBernstein
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements Certain statements provided by management in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other fac
Slide 3: Notes to Presentation
Notes to Presentation As of September 30, 2012, AXA and its subsidiaries had an approximate 64.2% economic interest in AllianceBernstein. AXA Group reports AllianceBernstein financial results at group share of 64.2%. In addition, AXA’s financial results are prepared on the basis of International Fin
Slide 4: Table of Contents
Table of Contents AllianceBernstein Overview State of the Firm: 2008 Our Long-Term Strategy for Growth: 2009 to Today AllianceBernstein Today: The Evolution of Our Business Conclusion: Four Years of Successful Execution Q&A AllianceBernstein.com 3
Slide 5: AllianceBernstein: Global, Profitable and Financially Strong
AllianceBernstein: Global, Profitable and Financially Strong A major global asset manager $419B in AUM as of September 30, 2012 3,400 employees worldwide Operating in 44 cities and 22 countries Billions in gross sales $56B in 2011 and $58B YTD 2012 $220B since 2009 Strong top line an
Slide 6: AllianceBernstein: Diverse by Strategy, Channel and Clients
AllianceBernstein: Diverse by Strategy, Channel and Clients $419 Billion in Total Firm Assets Under Management By Strategy By Channel By Client Domicile Alternatives Asset 3% Private Client Allocation Fixed $68B Income Non-US 12% 16% Other Equity 35% 14% 56% Retail 51% 65% 15% 33% $136B Institutions
Slide 7: State of the Firm: 2008
State of the Firm: 2008 Steep performance decline and severe asset losses in Institutional Large Cap Equities Decline exacerbated by overconcentration in two strategies: Global Value and Global Growth Languishing Retail business suffering from years of dis-investment Lack of product innovation a
Slide 8: Our Long-Term Strategy for Growth: 2009 to Today
Our Long-Term Strategy for Growth: 2009 to Today Invest for growth Reinvigorate Retail Build out in emerging growth areas – regions and products Innovate with new products to meet evolving client needs Address investment performance issues Fixed Income: Support and expand upon our success Equit
Slide 9: Invest for Growth: Reinvigorate Retail
Invest for Growth: Reinvigorate Retail New Retail Product Launches Growth in Global Retail Gross Sales ‘09 – 3Q12: 2008: $23.3B YTD ‘12: $39.9B 28 68 New Products Launched US $17 Billion in New Assets Non-US Non-US 19 11 78% 10 22% 73% 27% 1 US US 2008 2009 2010 2011 YTD '12 New Products as a Percen
Slide 10: Accelerating Retail Momentum in 2012
Accelerating Retail Momentum in 2012 Positive Momentum Continues… …With All Regions Contributing to YTD Gross Sales Growth $B $15.2 $12.9 $11.9 +91% +90% $8.2 $8.5 $7.3 $7.1 $3.5 $5.0 $2.3 +67% +67% +52% ($0.8) ($2.0) +30% ($3.8) ($4.4) ($9.0) ($8.4) ($10.5) ($10.9) ($10.6) ($10.2) ($11.7) 1Q11 2Q11
Slide 11: Invest for Growth: Build a Global, Integrated Fixed Income Platform
Invest for Growth: Build a Global, Integrated Fixed Income Platform A Solutions Driven Platform... …And a Long-Term Growth Engine… More Delivering strong and consistent performance for clients in a High Income diverse range of services Extending our global presence in fast-growing markets Return
Slide 12: Unique Success in Asia Retail
Unique Success in Asia Retail AB Market Share of Total Retail Market AUM Asia ex-Japan Retail Fixed Income AUM Growth (USD) $B (USD) $32.0 +493% South Korea $1.0B 2% $19.4 $17.1 Taiwan* $14.0B 19% $11.9 Hong Kong $5.4B 9% $5.4 Singapore $763M 2% 2008 2009 2010 2011 YTD '12 As of December 31, 2011 Ma
Slide 13: Innovate for Clients: Grow Our Asset Allocation Strategies
Innovate for Clients: Grow Our Asset Allocation Strategies Success With Asset Allocation Strategies $B $16.4 $49B Total AUM $12.9 12% of Firm AUM $6.0 $6.2 $4.9 $1.1 $1.5 Real Retirement Wealth Balanced Education Dynamic Asset Customized Retirement Asset Strategies Strategies Strategies Strategies A
Slide 14: Innovate for Clients: Dynamic Asset Allocation for Private Client
Innovate for Clients: Dynamic Asset Allocation for Private Client How Dynamic Asset Allocation (DAA) Benefits Clients Adjusting Clients’ Equity Allocation in Changing Markets Flexible and adaptive approach to asset allocation that aims to reduce portfolio volatility without sacrificing long-term 8
Slide 15: Innovate for Clients: Growth in Defined Contribution
Innovate for Clients: Growth in Defined Contribution Customized Retirement Strategies (CRS): Steady Growth CRS a Meaningful Component of Our Institutional Pipeline $B Total Pipeline: $8.5B* CRS $16.4 23% $14.6 Fixed Income 59% +343% 7% Passive 6% Equity Alternatives, 5% $8.6 Penetrating the US and U
Slide 16: Innovate for Clients: Building a Diverse Alternatives Platform
Innovate for Clients: Building a Diverse Alternatives Platform Total AUM: $11 Billion Multi-Manager Strategies Open-Ended Closed-End Hedge Fund and Private Equity Hedge Funds Drawdown Funds Legacy Distressed / Equity Mortgage Diversified Funds of Funds Global Macro Opportunistic Long / Short Backed
Slide 17: Fixed Income: Consistent Outperformance Across Strategies and Periods
Fixed Income: Consistence Outperformance Across Strategies and Periods Relative Performance Through 9/30/12 3Q12 YTD 12 1 Year 3 Year 5 Year US: Strategic Core Plus 0.8 1.3 1.1 1.9 0.9 High Yield 0.6 1.7 0.5 0.8 0.6 Core Fixed Income 0.7 1.2 1.0 1.4 0.5 Diversified Yield 2.8 6.2 7.3 5.3 1.9 Global:
Slide 18: Global Recognition for AllianceBernstein's Fixed Income Teams
Global Recognition for AllianceBernstein’s Fixed Income Teams Best Large Bond Group over Three Years, 2012 Best House for Offshore Funds Asia Asset Management 2011 Awards TAIWAN Best Retail House HONG KONG Source: Thomson Reuters/Lipper Awards, Asia Asset Management Awards and AsianInvestor Magazine
Slide 19: Equities: Meeting Client Needs Across the Risk/Return Spectrum
Equities: Meeting Client Needs Across the Risk/Return Spectrum Risk Focus Return Focus Search for smoother Search for reduction Search for return, returns, with emphasis of risk, higher with a willingness on stable businesses/ risk-adjusted returns to take risk cash flows Low Volatility Equity Incom
Slide 20: Equities Performance: Strength in Stability Equities, Improvement in Growth
Equities Performance: Strength in Stability Equities, Improvement in Growth Relative Performance Through 9/30/12 3Q12 YTD 12 1 Year 3 Year 5 Year Stability: US Market Neutral 0.6 2.2 3.7 2.5 N/A Global Market Neutral 1.5 4.3 3.9 N/A N/A Select US Equity 0.5 0.2 0.0 3.7 5.8 Growth & Income 0.4 1.5 1.
Slide 21: The Case for Deep Value Investing
The Case for Deep Value Investing Investors’ Flight to the “Safety” of High Dividend Yielding Stocks Has Skewed the Index and Increased Risk Percent of Total Market Cap of S&P 500 45 High Dividend Yield* 40 Percent 35 30 Low P/B** 25 20 15 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
Slide 22: Align Our Resources With Business Trends: Headcount
Align Our Resources With Business Trends: Headcount % Change ‘07 – ‘12 Headcount: (40)% Revenues*: (40)% 5,580 4,997 4,369 4,256 $4,525 3,764 3,364 $3,514 $2,907 $2,949 $2,750 $2,032 2007 2008 2009 2010 2011 YTD '12 Headcount Net Revenues ($ millions) *GAAP Revenues; 2012 revenues annualized to calc
Slide 23: Align Our Resources With Business Trends: Real Estate
Align Our Resources With Business Trends: Real Estate Phase I – 2010 to 2012: In 2010, identified 380,000 square feet in NY Metro area to be vacated and sublet and took $102M in charges associated with the planned reduction in space Regularly examined global real estate footprint to ensure space
Slide 24: AllianceBernstein Today: The Evolution of Our Business
AllianceBernstein Today: The Evolution of Our Business Dec 08: $221B Assets Under Management* Sept 12: $356B 49% of Firm Total ($ in Billions) 85% of Firm Total Fixed Equities ex- Equities ex- Fixed Income Large Cap** Large Cap** Income $60 $40 61% $157 Asset Growth $236 $49 Asset $19 Allocation All
Slide 25: Our Long-Term Strategy for Growth: Report Card
Our Long-Term Strategy for Growth: Report Card Where we’ve made the most progress: Building a leading global, integrated Fixed Income platform Growing our presence and establishing AB as a thought leader in Asset Allocation strategies Where we’ve made progress but still have work to do: Evolving
Slide 26: Four Years of Successful Execution: A Snapshot
Four Years of Successful Execution: A Snapshot Firmwide Initiative Progress Ongoing outperformance and global recognition in Fixed Income Improve investment performance and deliver for 89% of assets in services outperforming for 3-yr period through September 2012 clients 2012 Retail and Instit
Slide 27: Q&A
Q&A AllianceBernstein.com 26
Slide 28: Appendix
Appendix AllianceBernstein.com 27
Slide 29: Third Quarter 2012 Review: Financial Highlights
Third Quarter 2012 Review: Financial Highlights AllianceBernstein.com 28
Slide 30: Financial Highlights: Third Quarter 2012
Financial Highlights: Third Quarter 2012 In US $ Millions $574 $574 $602 $546 Adjusted Revenues 3Q:12 2Q:12 3Q:12 3Q:11 $495 $458 $458 $458 Adjusted Expenses 3Q:12 2Q:12 3Q:12 3Q:11 20.2% 20.2% 17.7% 16.1% Adjusted Operating Margin 3Q:12 2Q:12 3Q:12 3Q:11 36¢ 36¢ 30¢ 24¢ Adjusted EPU 3Q:12 2Q:12 3Q:
Slide 31: Third Quarter 2012 GAAP to Adjusted Reconciliation
Third Quarter 2012 GAAP to Adjusted Reconciliation In US dollar millions Adjustments Distribution- Pass Deferred Venture Real Related Through Compensation Capital Estate Adjusted GAAP Payments Expenses MTM Fund Charges (Non-GAAP) Net Revenues 708 (105) (26) (7) 4 0 574 Operating Expenses 764 (105) (
Slide 32: Third Quarter 2012 Adjusted Income Statement
Third Quarter 2012 Adjusted Income Statement Adjusted Operating Income improved 32% sequentially and 8% from the prior year quarter Adjusted EPU and distribution of 36 cents for 3Q12 3Q 2Q 3Q In US dollar millions (except EPU) 2012 2012 %∆ 2011 %∆ Adjusted Net Revenues $ 574 $ 546 5% $ 602 (5%)
Slide 33: Third Quarter 2012 Adjusted Revenues
Third Quarter 2012 Adjusted Revenues Base Fees sequential increase attributed to higher Retail AUM; the 9% decline versus the prior year period is primarily due to the decline in average AUM and continued shift from equity services into lower fee realization strategies Performance Fees increase
Slide 34: Third Quarter 2012 Adjusted Operating Expenses
Third Quarter 2012 Adjusted Operating Expenses Compensation Ratio, accrued as a percentage of adjusted net revenues, of approximately 50% for 3Q12 and 2Q12, and 49% in 3Q11 Total Compensation & Benefits increased 5% sequentially due primarily to the 5% increase in adjusted net revenues, and decr
Slide 35: Third Quarter 2012 Adjusted Operating Results
Third Quarter 2012 Adjusted Operating Results Adjusted Operating Margin improved versus both prior periods. Revenues improved sequentially, and versus the prior year quarter, expense reductions outpaced the decline in revenue. 3Q 2Q 3Q In US dollar millions (except EPU) 2012 2012 %∆ 2011 %∆ Adjust
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets Sept. 30, 2012 Dec. 31, 2011 Cash and cash equivalents $ 611 $ 639 Cash and securities, segregated 948 1,280 Receivables, net 1,413 1,339 Investments: Deferred compensation - related 152 176 Other 575 619 Goodwill 2,954 2,954 Intangible assets, net
Slide 37: Third Quarter 2012 GAAP Income Statement
Third Quarter 2012 GAAP Income Statement 3Q 2Q 3Q In US dollar millions (except EPU) 2012 2012 %∆ 2011 %∆ Net Revenues $ 708 $ 642 10% $ 642 10% Operating Expenses 764 563 36% 564 35% Operating (Loss) Income (56) 79 n/m 78 n/m Net (Loss) Income Attributable to AB Unitholders (44) 74 n/m 91 n/m AB Ho
Slide 38: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Nine Months Ended Sept. 30, 2012 Sept. 30, 2011 Net Income $ 119 $ 308 Non-cash items: Amortization of deferred sales commissions 29 29 Amortization of non-cash deferred compensation 12 125 Depreciation and other amortization 60 63 Unrealized (ga
Slide 39: AllianceBernstein Holding Financial Results
AllianceBernstein Holding Financial Results In US $ Millions (excluding per unit amounts) 3Q 2Q 3Q 2012 2012 %∆ 2011 %∆ AllianceBernstein Net (Loss) Income Attributable to AllianceBernstein ($44) $74 n/m $91 n/m Weighted Average Equity Ownership Interest 37.5% 37.5% 37.5% AllianceBernstein Holding E
Slide 40: Third Quarter 2012 GAAP to Adjusted Reconciliation
Third Quarter 2012 GAAP to Adjusted Reconciliation $ thousands except per Unit amounts, unaudited Adjustments Distribution- Pass Deferred Venture Real Non Related Through Compensation Capital Estate Controlling Adjusted GAAP Payments Expenses MTM Fund Charges Interests (Non-GAAP) (A) (B) (C) (D) (E)
Slide 41: AllianceBernstein Adjusted Earnings Reconciliation
AllianceBernstein Adjusted Earnings Reconciliation Three Months Ended $ thousands, unaudited 9/30/12 6/30/12 3/31/12 12/31/11 9/30/11 6/30/11 Net Revenues, GAAP basis $ 708,158 $ 642,163 $ 681,809 $ 624,978 $ 641,529 $ 727,994 Exclude: Deferred compensation-related investment (gains) losses (6,374)
Slide 42: Q&A
Q&A AllianceBernstein.com 41
Slide 43: AllianceBernstein
/B ALLIANCEBERNSTEIN