QUOTE AND NEWS
Forbes  Jun 23  Comment 
Remember Gluster, the scale-out file system that Red Hat snapped up for $136M in 2011? Anand Babu (AB) Periasamy, the brain behind Gluster is back to create an open source, lightweight, minimalistic object storage service called Minio that is...
OilVoice  Jun 22  Comment 
Lundin Petroleum AB is pleased to announce that the Board of Directors has appointed Alex Schneiter as President and Chief Executive Officer of Lundin Petroleum following Ashley Heppenstalls decision
Financial Times  Jun 16  Comment 
The second in a two-part series on the vast brewer’s culture and ambition
The Hindu Business Line  Jun 16  Comment 
Stockholm-based multinational pharma company, Medivir AB, has announced a partnership with Hyderabad-based GVK Biosciences Pvt Ltd. Medivir has conducted a review of its discovery resear...
The Times of India  Jun 16  Comment 
Forbes  Jun 15  Comment 
In case of a merger, AB InBev’s biggest gift to Diageo would be their strong hold over beer in many developed markets such as the U.S. However, the U.S. has been increasingly seeing customers shifting from beer to spirits, with market share for...
Market Intelligence Center  Jun 9  Comment 
Monday’s trading in AllianceBernstein Holding LP (AB) gives options traders an opportunity for a 11.11% return. By selling the Oct. '15 $30.00 call and buying the Jan. '16 call at the $25.00 level for a net debit of $4.50, traders will book a...
Mondo Visione  Jun 4  Comment 
Nasdaq (Nasdaq:NDAQ) announces today the results of the semi-annual review of the OMX Stockholm 30 Index (Nasdaq Stockholm: OMXS30) which will become effective with the market open on Wednesday, July 1, 2015. Nasdaq reports that there are no...
The Hindu Business Line  Jun 4  Comment 
Swedish truck maker Volvo AB is selling its remaining 3.7 per cent stake in auto firm Eicher Motors, in a deal that could be valued at around $278 million, according to a term sheet seen by IFR.




 

AllianceBernstein L.P. (NYSE: AB) is an asset management firm with over $480 billion in assets under management (AUM). Over 97% of AB's investments are in stocks and bonds.

The world's second largest insurance company AXA (headquartered in France) owns over 60% stake of AB.[1] The company's foreign ownership lets it avoid the 35% federal corporate tax, and instead pay minimal dues of 7.5% for an unincorpated business. However, AB's partnership status also means that it must distribute nearly all of its earnings to its fund holders, limiting the growth potential of the firm.

More than half of AB's AUM is invested abroad, and the international focus of the company helped to shield the company from the 2007 credit crunch.

Corporate Overview

Business Financials

In 2009, AB posted total revenues of $2.94 billion, a slight decrease from its 2008 total revenues of $3.57 billion. As a result of the decrease in revenues, AB's net income was adversely affected. Between 2008 and 2009, AB's net income declined from $244.7 million in 2008 to $167 million in 2009.

Business Segments

AB's AUM and revenue fall under the following categories:

Institutional Investment Services (60.5% of 2009 AUM)[2]

Institutional Investment Services refer to products and services provided for corporate or governmental investors using diversified investments into instruments like hedge funds, mutual funds, and investment trusts. At the end of 2009, total AUM for this segment was $300 billion.[2]

Retail Services (24.4% of 2009 AUM)[2]

Retail Services are designed for the individual investor as their funds are spread among a variety of investment vehicles like those of AB's Institutional Investment Services. Such vehicles include mutual funds and closed end funds, which offer a set number of shares for its funds. At the end of 2009, this segment had total AUM of $120.7 billion.[2]

Private Client Services (15.1% of 2009 AUM)

This segment includes AB's investment interactions with private clients. At the end of 2009, this segment had total AUM of $74.8 billion.[2]

Key Trends and Forces

Strong international exposure boosts AB business

AllianceBernstein is still largely an American firm, as 60% of its clients live in the U.S.[3] However, both individual and institutional business are becoming more and more international. In fact, the company invested 40% ($320 billion)[4] of their AUM overseas and 61% of their investment services ($489 billion)[3] were for clients (mainly institutional) outside the US. International markets are providing key business for AB, especially as the firm pushes through the 2007 credit crunch.

Competition

AllianceBernstein competes with many firms throughout the greater financial services industry. Some of its direct competitors include BlackRock (BLK), Legg Mason (LM), Eaton Vance (EV), and T. Rowe Price Group (TROW).

References

  1. AB 2007 10-K pg. 18  
  2. 2.0 2.1 2.2 2.3 2.4 AB 10-K 2009 Item 1 Pg. 6
  3. 3.0 3.1 AB 2007 10-K pg. 3-4  
  4. 2008 AB Conference Call
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