AllianceBernstein Holding L.P. Units

Thank you for standing by and welcome to the Alliance Bernstein second quarter 2024 earnings review. At this time, all participants are in a listen only mode. After the remarks, there will be a question and answer session and I will give you instructions on how to ask questions at that time. As a reminder, this conference is being recorded and will be available for replay on our website shortly after the conclusion of this call. I would now like to turn the conference over to the host for this call, Head of Investor Relations for AB. Mr. Mark Griffin, please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to our second quarter 2024 earnings review. This conference call is being webcast and accompanied by a slide presentation that's posted in the Investor Relations section of our website, www.allianceburnstein.com. With us today to discuss the company's results for the quarter are Seth Bernstein, President and CEO, and Jackie Marks, CFO. Ona Erzon, head of Global Client Group and Private Wealth, will join us for questions after our prepared remarks. Some of the information we'll present today is forward-looking and subject to certain SEC rules and regulations regarding disclosure. So I'd like to point out the Safe Harbor language on slide two of our presentation. You can also find our Safe Harbor language in the MD&A of our 10-Q, which we filed this morning. We base our distribution to unit holders on our adjusted results, which we provide in addition to and not as a substitute for our GAAP results. Our standard GAAP reporting and a reconciliation of GAAP to adjusted results are in our presentation appendix, press release, and our 10-Q. Under Regulation FD, management may only address questions of material nature from the investment community in a public forum, so please ask all such questions during this call. Now, I'll turn it over to Seth.

Good morning and thank you for joining us today. In the second quarter, AB's diversified global offering continued to drive sustained organic growth led by strength in both taxable and tax-exempt fixed income. We saw further market share gains in U.S. retail, Japan equities, and APAC ex-Japan fixed income. Our private markets business grew to $64 billion with fundings driven by private credit and real estate equity. As well, Equitable completed its initial $10 billion commitment. Notably, our private wealth business had its strongest alternative raise ever. And importantly, investment performance improved in equities and remained healthy and fixed income. As Jackie will detail, AB's adjusted operating margin was 30.8%, up 380 basis points year-on-year as we executed on our multi-year margin improvement plan. Taking a step back, we're benefiting from the progress made from our long-term strategy of building out distribution in U.S. retail and investing in private wealth. While it is early days, we're enthusiastic about what we're seeing in our insurance vehicle, and our start in China has been good, despite what are challenging local markets. Now let's get into the specifics, starting with a firm-wide overview on slide four. Second quarter gross sales were $31.9 billion, up $9.5 billion, or 42% from a year-ago period. Firmwide active net inflows were $1.3 billion, or 1% annualized organic growth. Quarter-end assets under management of $770 billion increased by 11% year-over-year and 1% from the end of the first quarter. And second quarter average assets under management were up 11% year-over-year and 2% sequentially. Slide 5 shows our quarterly flow trend by channel. Firm-wide, second quarter net inflows were $900 million. Strong retail gross sales of $23.2 billion increased 41% year-over-year, driven by both active fixed income and equities. Net inflows were 2.8 billion or 4% annualized organic as we continued to gain share in fixed income and active equities, notably in the US. Our institutional channel saw gross sales of 3.3 billion, while net outflows were 1.8 billion as active equity outflows outweighed insurance-led fixed income growth. In private wealth, gross sales remained strong at 5.4 billion, with slight net outflows reflecting seasonal tax-related selling. Investment performance is shown on slide six. Starting with fixed income, the Bloomberg Global Aggregate Bond Index ended lower by 1.1% in the second quarter as investment-grade corporate bond markets in the U.S. and Europe delivered positive returns, both absolute and relative, over government bonds. High-yield markets yet again outperformed both investment-grade and governments. AV's fixed income performance remained healthy, with 89% of assets outperforming over the one-year period, 68% over the three-year period, and 60% over the five-year periods. This performance translated to a 9% annualized organic growth across our fixed income asset base this quarter, with double-digit growth in institutional taxable and in-municipals. We're encouraged by growing client interest in our systematic suite. which leverages our quantitative factor-based research for which we've now launched four retail vehicles, including two Luxembourg domiciled UCIPS funds announced earlier this week, in addition to segregated mandates for institutional clients. With 6.4 trillion of cash sitting on the sidelines today, it stands to reason that bond flow should benefit handsomely as the Fed gets closer to lowering interest rates, which we expect later this year. Turning to equities, the U.S. equity markets rallied again in the second quarter, with the S&P 500 index gaining 4.3%, primarily driven by larger technology stocks, as market breadth deteriorated during the quarter. Value underperformed growth, while small caps lagged large caps. Importantly, our investment performance improved as our large retail funds outperformed. including several foreign domicile funds that we now show ranked against their Morningstar peer groups for all periods. 68%, 65%, and 64% of our equity assets outperformed over the one, three, and five-year periods, respectively. While we continue to see outflows in equities in the quarter, recent outflows have slowed, and we are seeing increased opportunities with clients. Specifically, we see increased interest in value, giving meaningful valuation spreads to growth, and we were encouraged by a $200 million win in the quarter for U.S. large cap value, for which relative performance is strong. We're also seeing momentum build for our new European global growth service across both institutional and retail channels. Now I'll review our client channels, beginning with retail, on slide seven. Growth sales remain robust to $23 billion, up 41% year-over-year. Net inflows of $2.8 billion reflected our strong geographic and product breadth, led by munis, high-income, and U.S. large-cap growth. In taxable fixed income, we grew organically at a 7% annualized, with our two large offshore high-income funds both ranking first in their categories for net inflows and mortgage income ranking second in its category. We're pleased that mortgage income, a barbell strategy with a short-duration profile that complements our income suite, crossed the billion-dollar mark this quarter, with strong rankings across a 10-year track record. Muniz posted net inflows of $1.5 billion, a 17% annualized organic growth rate, positive 15 out of the last 16 quarters. Notably, active equity sales were up over both periods with net inflows of 400 million driven by U.S. large cap growth. We continue to see strength in retail active equity July to date. In the quarter, we launched two more active ETFs and we converted another one last week. Our 15 ETFs, which are principally new services rather than existing services and new wrappers, now total $4.6 billion. including our first ETF year, which now exceeds $1 billion. Turning to institutional on slide 8, second quarter gross sales were $3.3 billion, up $1.8 billion from a year ago and in line sequentially. Net outflows of $1.8 billion improved versus prior periods. Insurance-led fixed income growth was outweighed by active equity redemptions. Encouragingly, we saw 3.2 billion of fundings from our pipeline this quarter, including over $1 billion at A.B. Carvel. And Equitable completed its initial $10 billion commitment to our private markets program with fundings in the quarter to A.B. Carvel's residential mortgage strategy and U.S. credit. The pipeline was 9.8 billion at quarter end, down 1.7 billion sequentially. Pipeline additions, also 1.7 billion, were driven primarily by private placements, global plus fixed income, and short duration wins. Moving to private wealth on slide nine. Second quarter gross sales of $5.4 billion were up 20% year over year and in line sequentially driven by strong advisor productivity. Seasonal tax-related selling consistent with last year's second quarter turned an otherwise net inflowing quarter into $100 million net outflow. Strategies with net inflows included real estate, our proprietary direct indexing strategy, ETFs, and munis. Year-to-date, we remain on track for our fourth consecutive year of organic growth. As previewed last quarter, we fielded a strong slate of alternative offerings, which drove a record alternatives raise of over $1.3 billion. Real estate equity led with our largest single close ever. with additional raises by AB Carval and our private equity fund of funds. On a year-to-date basis, alternatives raises are up 28% year-over-year, proof of the strong flywheel effect as our private wealth business catalyzes growth of our longer-dated private alternative strategies. Now I'll turn it over to Jackie to discuss the financials and wrap up before taking questions. Jackie?