Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Having worked in Risk Management and wearing the Risk lens for close to a decade, my judgment is ofte ...

Core Viewpoint - The comparison between AllianceBernstein (AB) and Carlyle Group (CG) indicates that AB presents a better value opportunity for investors at this time due to stronger earnings estimate revisions and more attractive valuation metrics [1][3][7]. Valuation Metrics - AllianceBernstein has a forward P/E ratio of 10.69, while Carlyle Group has a forward P/E of 10.81 [5]. - The PEG ratio for AB is 0.84, indicating a more favorable expected earnings growth rate compared to CG's PEG ratio of 1.07 [5]. - AB's P/B ratio stands at 2.09, compared to CG's P/B ratio of 2.60, suggesting that AB is more undervalued relative to its book value [6]. Analyst Outlook - AB holds a Zacks Rank of 2 (Buy), reflecting a more positive analyst outlook due to stronger earnings estimate revision activity, while CG has a Zacks Rank of 3 (Hold) [3][7]. - The Value grade for AB is B, indicating it is considered undervalued, whereas CG has a Value grade of C [6].

Core Insights - AllianceBernstein L.P. reported a decrease in preliminary assets under management (AUM) to $805 billion in February 2025, down from $809 billion at the end of January, marking a 0.5% decline driven entirely by market depreciation [1] - Firmwide net flows were flat in February, with net inflows into Private Wealth being offset by Institutional net outflows, while Retail flows remained unchanged [1] AUM Breakdown - As of February 28, 2025, the total AUM was $805 billion, with a breakdown as follows: - Total Equity: $333 billion, down from $342 billion in January - Total Fixed Income: $303 billion, up from $299 billion in January - Alternatives/Multi-Asset: $169 billion, slightly up from $168 billion in January [2][3] Channel Performance - Private Wealth AUM stood at $140 billion, unchanged from January - Institutional AUM decreased to $328 billion from $327 billion in January - Retail AUM decreased to $337 billion from $343 billion in January [3]

Core Insights - AB Science's lead compound, masitinib, is highlighted as a potential breakthrough treatment for progressive multiple sclerosis (MS) due to its unique mechanism of action targeting mast cells and microglia [1][2][3] - Professor Patrick Vermersch, a prominent neurologist, emphasizes the significant role of neuroinflammation in neurodegenerative disorders, including MS, and the importance of addressing the pro-inflammatory activity of mast and microglial cells [1][2] - Phase IIB/III trials of masitinib have shown promising results in reducing neuroinflammation and slowing disease progression, with further phase III data expected to clarify which patient groups may benefit most [3] Company Overview - AB Science, founded in 2001, specializes in the research, development, and commercialization of protein kinase inhibitors (PKIs) targeting diseases with high unmet medical needs [5][6] - The company is headquartered in Paris, France, and is listed on Euronext Paris under the ticker AB [6] - Masitinib has been registered for veterinary medicine and is being developed for human medicine in various fields, including oncology and neurological diseases [6]

Assets Under Management (AUM) - Total Assets Under Management (AUM) as of December 31, 2024, were $792.2 billion, an increase of $67.0 billion or 9.2% from the previous year, driven by market appreciation of $68.5 billion, partially offset by net outflows of $2.2 billion[201]. - Institutional AUM increased by $4.3 billion, or 1.3%, to $321.4 billion, primarily due to market appreciation of $20.7 billion, despite net outflows of $16.5 billion[202]. - Retail AUM rose by $47.5 billion, or 16.6%, to $334.3 billion, driven by market appreciation of $34.2 billion and net inflows of $13.4 billion[203]. - Private Wealth Management AUM increased by $15.2 billion, or 12.6%, to $136.5 billion, mainly due to market appreciation of $13.6 billion and net inflows of $0.9 billion[204]. - Total assets under management reached $792.2 billion as of December 31, 2024, up 9.2% from $725.2 billion in 2023[238]. - The total equity assets under management increased to $331.7 billion in 2024, a rise of 7.2% from $309.6 billion in 2023[238]. - The Institutional channel's average AUM rose to $322.9 billion in 2024, a 6.0% increase from $304.6 billion in 2023, while ending AUM increased by 1.3% to $321.4 billion[247]. - The Retail channel's average AUM reached $315.3 billion, a significant increase of 20.4% compared to $262.0 billion in 2023, with ending AUM at $334.3 billion[248]. - The Private Wealth Management channel's average AUM grew by 14.6% to $130.3 billion in 2024, with ending AUM at $136.5 billion, reflecting a 12.6% increase[249]. - Market appreciation contributed $68.5 million to the total assets under management in 2024, with $20.7 million from institutions and $34.2 million from retail[241]. - The company reported a net change of $67.0 billion in total AUM from December 31, 2023, to December 31, 2024[243]. Financial Performance - Net revenues for 2024 were $4.5 billion, an increase of $319.8 million, or 7.7%, compared to $4.2 billion in 2023, primarily due to higher investment advisory base fees and distribution revenues[206]. - Operating income increased by $306.4 million, or 37.5%, to $1.1 billion, with an operating margin rising to 24.7% from 19.1% in 2023[208]. - Net income attributable to AB Unitholders was $1.173 billion in 2024, reflecting a 53.4% increase from $764.6 million in 2023[224]. - For the year ended December 31, 2024, adjusted diluted net income per AB Holding Unit was $3.25, an increase from $2.69 in 2023, reflecting a growth of 20.8%[229]. - The company reported a net income of $423.4 million for the year ended December 31, 2024, compared to $264.2 million in 2023, representing a significant increase of 60.3%[229]. - Cash distributions to Unitholders increased by $45.1 million in 2024, totaling $340.5 million, compared to $294.0 million in 2023[233]. - The company recognized a gain of $128.5 million in contingent payment arrangements related to the acquisition of AB Carval in 2022[254]. - Total net revenues for 2024 increased by $319.8 million, or 7.7%, reaching $4,475.1 million compared to $4,155.3 million in 2023[282]. - Investment advisory and services fees rose by $466.7 million, or 15.7%, in 2024, driven by a $340.6 million increase in base fees and a $126.1 million increase in performance-based fees[288]. - Performance-based fees surged by $126.1 million, or 87.0%, in 2024, primarily due to higher fees from several funds, including the Financial Services Opportunities fund[289]. - Distribution revenues increased by $140.4 million, or 23.9%, in 2024, attributed to a 20.0% rise in average AUM of mutual funds[295]. Expenses and Costs - Total expenses for 2024 were $3,351,066,000, a slight increase of 0.4% from $3,337,653,000 in 2023[254]. - Higher base advisory fees contributed $340.6 million to the increase in net income for 2024[254]. - Employee compensation and benefits expense increased by $32.6 million, or 1.8%, in 2024, primarily due to higher incentive compensation of $92.9 million and higher commissions of $27.9 million[305]. - Promotion and servicing expenses increased by $119.7 million, or 13.9%, in 2024, driven by higher distribution-related payments of $132.1 million and higher amortization of deferred sales commissions of $21.2 million[308]. - General and administrative expenses increased by $17.6 million, or 3.0%, in 2024, with a percentage of net revenues at 13.4% compared to 14.0% in 2023[309]. - Interest expense decreased by $10.9 million in 2024, with average daily borrowings at $762.4 million and a weighted average interest rate of 5.3%[313]. - Income tax expense increased by $36.1 million, or 124.2%, in 2024, resulting in a higher effective tax rate of 5.2% compared to 3.6% in 2023[318]. Cash Flow and Liquidity - The net cash provided by operating activities for the year ended December 31, 2024, was $340.5 million, compared to $294.0 million in 2023, marking an increase of 15.8%[231]. - Net cash provided by operating activities was $1.4 billion in 2024, compared to $0.9 billion in 2023, primarily due to higher earnings of $312.5 million[322]. - Net cash used in investing activities was $115.7 million in 2024, compared to $33.6 million in 2023, mainly due to higher purchases of furniture and equipment[323]. - In 2024, net cash used in financing activities was $1.6 billion, an increase from $1.0 billion in 2023, primarily due to higher debt repayments of $608.6 million and cash distributions to Unitholders of $115.2 million[325]. - As of December 31, 2024, AB had $832.0 million in cash and cash equivalents, with $460.1 million held by foreign subsidiaries[326]. - Management believes cash flow from operations and debt issuance will provide adequate liquidity for financial obligations[328]. - AB's financial condition allows for adequate liquidity for general business needs, supported by access to public and private debt markets[328]. Strategic Initiatives - The joint venture with Societe Generale was completed on April 1, 2024, with AB retaining the Bernstein Private Wealth Management business[216]. - The joint venture with Societe Generale aims to enhance services for institutional investors, indicating a strategic market expansion[394]. - AB provides a broad range of investment services, including institutional, retail, and private wealth management, with a focus on ESG and alternative investments[394]. - AB's focus on sustainable and responsible investment strategies aligns with growing client demand for ESG-focused portfolios[394]. Ownership and Structure - The weighted average equity ownership interest in AB was 39.4% in 2024, slightly up from 39.2% in 2023[229]. - AB's ownership structure as of December 31, 2024, shows EQH and its subsidiaries holding 61.9%, AB Holding at 37.5%, and unaffiliated holders at 0.6%[395]. - AB Holding's investment in AB is recorded using the equity method, reflecting its share of AB's income and losses[398]. Market Conditions and Risks - The ability to access public and private capital markets may be limited by adverse market conditions and changes in credit ratings[355]. - The company's financial condition is subject to the performance of capital markets and the ability to maintain and grow client assets under management[355]. - A 10% decrease in equity prices would result in a $33,338,000 decrease in the fair value of other investments as of December 31, 2024[360].

Core Insights - AllianceBernstein L.P. and AllianceBernstein Holding L.P. reported a preliminary increase in assets under management (AUM) to $809 billion in January 2025, up from $792 billion at the end of December 2024, representing a 2% month-over-month growth driven by market appreciation and slightly positive firmwide net flows [1][2] Summary by Category Assets Under Management - As of January 31, 2025, total AUM reached $809 billion, with a breakdown of $327 billion in Private Wealth, $343 billion in Retail, and $139 billion in Institutions [2] - The total AUM for December 31, 2024, was $792 billion, indicating a growth of $17 billion in January 2025 [1][2] Performance by Channel - Net inflows were observed in the Retail and Institutional channels, while there were net outflows in the Private Wealth segment [1] - The increase in AUM was primarily attributed to market appreciation, highlighting the impact of market conditions on investment performance [1] Investment Strategy - The firm offers a diversified range of investment services, including actively managed and passive equity, fixed income, and alternatives/multi-asset solutions [2] - Total equity AUM was $342 billion, with actively managed equity accounting for $272 billion and passive equity for $70 billion [2]

Financial Data and Key Metrics Changes - Fourth quarter adjusted earnings per unit were $1.05, up 36% year-over-year, while full-year adjusted earnings were $3.25, up 21% compared to the previous year [42] - Fourth quarter net revenues reached $973 million, a 12% increase year-over-year, and full-year revenues totaled $3.5 billion, up 5% from the prior year [44] - Fourth quarter performance fees surged to $133 million, reflecting strong alpha generation, while full-year performance fees increased 80% to $227 million [45][59] Business Line Data and Key Metrics Changes - The active platform delivered over $4 billion of net inflows in 2024, with the active fixed income platform growing at a 9% annual organic growth rate, totaling over $24 billion in inflows [13] - Active equity outflows totaled $7 billion in the fourth quarter and $24 billion for the full year, primarily driven by institutional redemptions [14][15] - The private markets AUM stood at $70 billion at year-end, up 14% in 2024, with significant commitments from Equitable [17][38] Market Data and Key Metrics Changes - The retail channel experienced six consecutive quarters of organic growth, with annual flows reaching the highest level in three years [27] - Institutional demand for taxable fixed income grew 3% annually, while net deployments into alternatives exceeded $2 billion [32] - The firm-wide fee rate was 39.8 basis points, slightly lower than the previous quarter, influenced by market conditions and client demand [55] Company Strategy and Development Direction - The company aims to reach $90 billion to $100 billion in private markets AUM by 2027, with these products expected to generate over 20% of asset management revenues [38] - The strategic partnership with Equitable is seen as a critical component for growth, particularly in insurance asset management [40][108] - The company is focused on investing in new products and teams, particularly in alternative assets and wealth management [125] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about fixed income demand into 2025, citing strong interest in short and intermediate duration funds [23][81] - The company is experiencing positive trends in various markets, including strong performance in the U.S. retail and Japan [112][113] - The outlook for equity performance is improving, with growth portfolios gaining traction [119] Other Important Information - The relocation of the New York City office is expected to generate approximately $50 million in annual occupancy-related savings [12][51] - The effective tax rate for 2024 was 5.2%, with guidance for 2025 set at 6% to 7% [54] Q&A Session Summary Question: Thoughts on corporate structure and potential conversion to C Corp - Management discussed the tax implications and the impact on index inclusion, indicating that conversion is not currently being pursued due to the risks involved [72][76] Question: Bond reallocation and fixed income demand - Management noted strong interest in fixed income, particularly in municipal bonds, and highlighted the potential for duration extensions [81][84] Question: Organic base fee growth and its durability - Management expressed confidence in the resilience of the fee rate due to a diverse business mix and strong distribution capabilities [92][93] Question: Investment spending and M&A considerations - Management is focused on strategic growth investments in alternative assets and wealth management, while remaining disciplined about costs [125][126] Question: Active ETFs scaling and investor profile - The company has launched 17 active ETFs, with strong performance in the RIA channel and plans for further expansion in Asia and emerging markets [131][135]

Fourth Quarter 2024 Review February 6, 2025 Seth P. Bernstein, President & Chief Executive Officer Jackie Marks, Chief Financial Officer 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 factors that could cause actual results to differ materially from future result ...

Financial Performance - GAAP diluted net income per unit for Q4 2024 was $0.94, a 32.4% increase from $0.71 in Q4 2023[25] - Adjusted diluted net income per unit for Q4 2024 was $1.05, up 36.4% from $0.77 in Q4 2023[25] - Total net revenues for Q4 2024 were $1.26 billion, a 15.3% increase from $1.09 billion in Q4 2023[19] - Total revenues for 2024 reached $4,559,652, a 7.0% increase from $4,262,864 in 2023[46] - Net income attributable to AB Unitholders for Q4 2024 was $299.8 million, a 31.9% increase from $227.3 million in Q4 2023[45] - Net income attributable to AB Unitholders increased by 53.4% to $1,173,247 from $764,610 in 2023[46] - Diluted net income per unit rose by 58.5% to $3.71, up from $2.34 in 2023[47] - The diluted net income per holding unit on a GAAP basis was $3.71 for the year, compared to $2.34 in the previous year, marking a significant increase of 58.8%[60] Assets Under Management - Average assets under management (AUM) for 2024 grew 13% to $768.5 billion from $680.3 billion in 2023[2] - Total assets under management as of December 31, 2024, were $792.2 billion, a 9.2% increase from $725.2 billion a year earlier[9] - Ending assets under management as of December 31, 2024, were $792.2 billion, an increase from $725.2 billion in 2023[55] Operating Income and Expenses - Full-year 2024 adjusted operating income grew 20% to $1.14 billion from $951 million in 2023[2] - Fourth quarter 2024 adjusted operating income was $354 million, a 40% increase from $254 million in Q4 2023, with an adjusted operating margin of 36.4%, up 720 basis points[32] - The adjusted operating margin for full year 2024 was 32.3%, an increase of 410 basis points from 28.2% in 2023[32] - Full year 2024 adjusted operating expenses totaled $2.4 billion, a decrease of 1% from 2023, primarily due to lower G&A and promotion expenses[31] - Fourth quarter 2024 adjusted operating expenses were $619 million, a slight increase from $617 million in Q4 2023, driven by higher employee compensation and benefits[30] - Total operating expenses for 2024 were $3,351,066, a slight increase of 0.4% from $3,337,653 in 2023[46] Cash Distribution - Cash distribution per unit for Q4 2024 was $1.05, a 36.4% increase from $0.77 in Q4 2023[25] - Distribution per unit increased by 21.2% to $3.26 from $2.69 in 2023[47] Inflows and Outflows - The retail channel experienced net inflows of $13.4 billion for the full year 2024, compared to $3.7 billion in the prior year[12] - Institutional channel net outflows for 2024 were $16.5 billion, compared to $11.8 billion in the prior year[11] - The company reported a total of $792.2 million in net flows, with U.S. clients contributing $581.0 million and non-U.S. clients contributing $211.2 million[58] - The company experienced a net outflow of $30.7 million in actively managed equity investments, while passively managed equity investments saw a net outflow of $6.6 million[58] Performance Fees - Performance fees surged by 87.0% to $270,964 compared to $144,911 in the previous year[46] - Performance fees rising by 172% in Q4 2024[45] Employee and Headcount - As of December 31, 2024, headcount decreased to 4,341 employees from 4,707 employees a year earlier, due to the deconsolidation of Bernstein Research Services[35] Joint Ventures and Acquisitions - The joint venture with Societe Generale was completed on April 1, 2024, focusing on equity research and cash equity trading[47] - The company plans to fully divest from both joint ventures, and as such, income or loss associated with these investments will be excluded from adjusted operating income[74] - Acquisition-related expenses, including professional fees and changes in fair value, are excluded from core operating results for financial comparisons[73] Financial Reporting Adjustments - The impact of non-GAAP adjustments on diluted net income was $52,531,000 for the twelve months ended December 31, 2024, highlighting the significance of these adjustments in financial reporting[60] - Adjusted operating income excludes interest on borrowings to align with industry peers[75] - Compensation expenses related to equity awards granted to executives are excluded from non-GAAP measures as they are non-cash and based on EQH's performance[72] - Fluctuations in the value of long-term incentive compensation investments are recorded within investment gains and losses on the income statement[70] - Losses from the termination of the defined benefit retirement plan are considered non-cash and short-term, thus excluded from core operating results[71]

Core Insights - AllianceBernstein reported a transformative year in 2024, achieving significant net inflows and growth in various investment channels despite experiencing outflows in the fourth quarter [2][4] - The company’s active fixed income flows reached a record high of $24.5 billion, nearly double compared to 2023, while alternatives and multi-asset strategies also saw strong performance [2][4] - The firm’s average assets under management (AUM) grew by 13% year-over-year, with adjusted operating income increasing by 20% and adjusted operating margins expanding to 32.3% [2][4] Financial Performance - For Q4 2024, net revenues were $1.26 billion, a 15.3% increase from Q4 2023, while full-year net revenues reached $4.48 billion, up 7.7% from 2023 [15][16] - Operating income for Q4 2024 was $318 million, a 33.1% increase from the previous year, with an operating margin of 25.0% [21] - The diluted net income per unit for Q4 2024 was $0.94, a 32.4% increase from $0.71 in Q4 2023, while the full-year diluted net income per unit rose to $3.71 from $2.34 [22][45] Assets Under Management - As of December 31, 2024, total AUM was $792.2 billion, reflecting a 9% increase from the previous year [7][47] - The retail channel experienced net inflows of $13.4 billion for the full year, while the institutional channel faced net outflows of $16.5 billion [10][9] - The private wealth channel also registered net inflows of $0.9 billion for the year, indicating a positive trend in this segment [11] Market Trends - The global equity and fixed income markets showed mixed performance in Q4 2024, with the S&P 500 total return at 2.4% for the quarter and 25.0% for the year [5][6] - The institutional pipeline at year-end was $10.7 billion, indicating strong potential for future fundings [3] Strategic Initiatives - The company emphasized its commitment to adapting to changing market conditions and client needs, with a focus on cross-asset expertise to unlock investment opportunities [4] - AllianceBernstein's retail channel grew organically by 5%, driven by strong demand for tax-exempt and taxable fixed income products [3]