QUOTE AND NEWS
The Hindu Business Line  May 14  Comment 
Pinky Mehta will become AB Nuvo CFO; appointments will be effective July 1
newratings.com  May 13  Comment 
OTTAWA (dpa-AFX) - Swedish furniture retailer Ikea AB has recalled about 75,000 Patrull Klamma and Patrull Smidig pressure-mounted safety gates in the U.S. and Canada, citing fall hazard as the gates may fail to stay closed. Ikea made the recall...
guardian.co.uk  May 13  Comment 
Company cautious on outlook but analysts see brewer as takeover target SABMiller has reported better than expected profits, and even though it was cautious about the outlook its shares have moved higher on continuing bid hopes. The world’s...
Insurance Journal  May 12  Comment 
ACE Group has expanded its range of excess casualty corporate risk coverages to provide more extensive protection to middle market clients. The enhanced offerings, available for businesses with revenues up to $1 billion, include ACE’s new AB...
OilVoice  May 11  Comment 
Jerome Schurink has decided to step down as director and chairman of the board in PA Resources AB as a result of taking up a new position based in Dubai. In the interim until the upcoming annual gen
Reuters  May 11  Comment 
* Enters into cooperation with Bausch & Lomb Nordic AB, a subsidiary of Valeant Pharmaceuticals Inc
Forbes  May 8  Comment 
As expected, AB InBev?s commitment to its premium brand profiling, and more emphasis on sales of premium beer brands, led to a solid rise in revenue per hectoliter, which increased by 7.5% year-over-year in Q1, excluding the impact of currency...
newratings.com  May 8  Comment 
WASHINGTON (dpa-AFX) - Music-streaming company Spotify AB is laying plans to enter Web-video business, the Wall street Journal reported citing people familiar with the matter, preparing to take on powerhouses like YouTube and Facebook Inc. (FB) in...
Reuters  May 7  Comment 
Shares of brewer SABMiller rose more than 3 percent on Thursday, with traders citing a revival of talk of a possible takeover bid from rival Anheuser-Busch InBev .
Mondo Visione  May 7  Comment 
Nasdaq (NASDAQ:NDAQ) announces today the results of the semi-annual review of the OMX Stockholm Benchmark index, (Nasdaq Stockholm: OMXSB), which will become effective with the market open on Monday, June 1, 2015. Haldex AB (HLDX), Sagax AB B...




 

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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