AllianceBernstein Holding L.P. Units

Hello everyone, thank you for joining us and welcome to the Alliance Bernstein 3rd Quarter 2026 Earnings Review. At this time, all participants are in a listen-only mode. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. 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. Ioanis Jorgali. Please go ahead.

Good morning, everyone, and welcome to our third quarter 2026 Airnex review. Today's conference call is being webcast and is accompanied by a slide presentation available in the investor relations section of our website at www.alliancebernstein.com. Joining us today to discuss the company's quarterly results are Seth Bernstein, our Chief Executive Officer, and Tom Simeone, our Chief Financial Officer. Onur Erzan, our president will join us for the question and answer session following 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 would 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'll file later this week. We base our distribution to unit holders on our adjusted results, which we provide in addition to and not as a substitute for our GAP results. Our standard GAP reporting and reconciliation of GAP to adjusted are in our presentation appendix, press release, and our 10Q. 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. Before reviewing our results, I want to briefly address our leadership transition that was announced in September. For nearly a decade, I've been privileged to lead Alliance Bernstein, working alongside an exceptional group of colleagues whose dedication to our clients, our culture, and one another empowered the firm to grow through a period of profound industry evolution. Together, we transformed our private markets platform from a niche capability into its scale global franchise. We built leading positions in insurance asset management, municipals, retirement solutions, thematic investing, and private wealth. We relocated our corporate headquarters to Nashville and continued investing in talent and capabilities that will position AB for long-term success. While I'm proud of what we've accomplished, these achievements are not an endpoint. They are a foundation upon which AB's next chapter of growth will be built. Few people have contributed more to that foundation than Onur Erzan, who, in addition to being president, will become AB's chief executive officer on April 1, 2027. Onur has been a driving force behind many of AB's most important strategic initiatives, and I believe he's uniquely positioned to lead the firm forward. His vision, leadership, and track record of execution give me tremendous confidence in AB's future, a future I look forward to supporting as a board member after my retirement. Now, moving on to slide three, I will review the key business highlights of our third quarter. First, we ended the quarter with approximately $900 billion in assets under management. As we onboard 100 billion of core bridge assets over time, we see a clear path to reaching 1 trillion in AUM. I'm pleased with the progress we're making, not only on the operational groundwork to onboard these assets, but more importantly, in deepening our strategic partnership with Corbridge. The opportunity extends well beyond managing the company's existing assets, as the combined Corbridge and Equitable are expected to generate sizable ongoing net flows. We're also focused on identifying paths to further commercialize Corbridge's existing private asset capabilities in private placements, mortgage loans, and real estate equity. As the insurance marketplace continues to evolve, traditional asset liability management is giving way to more strategic balance sheet construction. Public and private markets are increasingly converging, and insurers are seeking integrated solutions that optimize risk, capital, and return. These trends align directly with AB's differentiated capabilities and position us for further growth in asset management and in derivatives transaction execution. We managed $226 billion in net insurance assets, including $58 billion of third-party insurance AUM across more than 100 clients. General accounts total $139 billion, up 18% year over year. Bernstein Private Wealth ended the quarter with $165 billion in client assets, representing 18% of firm-wide AUM while contributing more than one-third of firm-wide revenues. We are expanding relationships with ultra-high net worth clients, family offices, entrepreneurs, and business owners. Client segments whose complex needs require a high degree of customization and service that is difficult to replicate. Our platform enables advisors to focus on advice and relationship development while leveraging specialized expertise across financial and tax planning, trust in estate services, and family governance. We believe Bernstein is a compelling platform for recruiting and retaining top advisor talent with a differentiated value proposition that empowers industry-leading productivity while strengthening client outcomes. Our customized retirement platform accounts for nearly $117 billion in assets. As plan sponsors increasingly seek personalized retirement solutions, lifetime income capabilities, and broader access to public and private markets, we believe AB could be ideally positioned to help improve participant outcomes. Taking together, our insurance, wealth, and retirement businesses provide direct access to large and growing pools of long-duration capital. These channels now represent approximately half of firm-wide AUM and enhance the resiliency, visibility, and long-term growth profile of our business across market environments. Second, we continue to expand our investment and distribution footprint through strategic partnerships, greater customization, and vehicle innovation. Mark Randall Manley, Seth Perry Bernstein, Karl Sprules, Mark Randall Manley, Seth Perry Bernstein, Karl Sprules, Mark Randall One example is our active ETF franchise, which we continue to globalize. Today, the platform spans 34 products and $21 billion of AUM, with assets growing 31% organically during the third quarter and 68% over the last 12 months. From a near standing start less than four years ago, the business has scaled to generate annualized management fees of roughly $100 million. This growth reflects both increasing demand for active investment strategies and more efficient wrappers and our ability to extend successful investment capabilities across geographies, channels, and client segments. We're seeing a similar trend in separately managed accounts. Our retail SMA platform stands at $68 billion at BayUM and generated 15% annualized organic growth during the quarter and 17% over the last 12 months. While municipals are still the foundation of the platform, we're encouraged by the early momentum we're seeing as we extend these capabilities into taxable fixed income. Over time, we believe SMAs will be a significant growth opportunity as personalization, technology, and advisor demand continue to converge, creating a larger adjustable market for customized investment solutions. Third, firm-wide net inflows approached $7 billion in the third quarter, growing organically for the second straight quarter at a 3% annualized rate. Alternatives and multi-asset solutions led the way, generating $15 billion of net inflows, reflecting the onboarding of approximately $12 billion of commercial mortgage loans from Equitable. Importantly, the segment generated positive net inflows even excluding the CML mandate, marking seven consecutive quarters of positive organic growth. A.B. delivered positive net inflows for the 15th consecutive quarter, despite one of the most challenging markets for fixed income in decades. While rising rates created significant volatility, our investment performance, distribution strength, and market leadership allowed us to continue gaining share in tax-exempt with nearly $2 billion in net inflows. Within taxable fixed income demand varied by client channel. Institutional clients contributed nearly $4 billion of net inflows, primarily to our investment-grade strategies. These gains were largely offset by more than $3 billion of retail net outflows as heightened rate volatility continued to weigh on demand for our income franchise. Inequities past the strategies generated over $2 billion of net inflows, driven largely by institutional demand. Active equities remain under pressure, with more than $12 billion of net outflows concentrated across our largest mutual funds, partially offset by continued growth in active ETFs and thematic portfolios. Slide 4 provides an overview of our financial results, which Tom will discuss in greater detail shortly. Skipping to slide 5, I'll review our investment performance, starting with fixed income. Bonds markets face particularly challenging third quarter as inflation concerns intensified on the back of higher energy prices and structurally growing debt issuance, pushing rate expectations higher. Against the backdrop of resilient growth and healthy labor markets, global central banks turned hawkish, with the Fed raising rates for the first time since 2023. Higher rates push total returns into negative territory across fixed income, with high-yield outperforming investment grade given its higher income and lower duration. Municipals posted the weakest quarterly performance for the asset class in more than 30 years. During the quarter, the Bloomberg U.S. Aggregate Index returned negative 3.5%, the Global High Yield Index returned negative 2%, and the Bloomberg Municipal Index returned negative 6.3%. 49% of our fixed income AUM outperformed over the one-year period, with 72% and 60% outperforming over three and five years. Decline over the one-year performance was primarily driven by our duration exposure as yields moved higher. Our short and intermediate duration portfolios and securitized strategies largely outperformed their respective benchmarks over the shorter-term periods, with mortgage income maintaining a top decile performance over one, five, and 10 years. While the elevated rates volatility may dampen sentiment and appetite for duration, we believe the long-term value proposition for fixed income is now compelling, and AB has the right strategies to compete for the next wave of the reallocation. Credit is still an area of opportunity with all-in yields presenting an appealing risk-adjusted return profile compared to long-term equity forecasts. Turning to equities, markets posted modest gains, but dispersion between geographies, styles, and industries rose. The S&P 500 returned 2.3%, outperforming the Russell 2000 by nearly 10 percentage points. Against this backdrop, 26, 27, and 33% of equity AUM outperformed over the one, three, and five-year periods. The AI build-out is no longer a single sector story. It now ties together firms, industries, and even asset classes that once moved independently. As a result, traditional diversification provides less protection than it used to. Diversification may be getting harder to find, but that only makes it more valuable. That is exactly where our platform is built to help clients. Quality companies with durable free cash flow, value and dividend growth strategies that have historically benefited when rates are higher and lower correlation exposures in Europe, Japan, U.S. small cap and emerging markets beyond AI linked chips. We have 25 services with over $40 billion of combined AUM that continue to outperform over three and five years, led by international strategic equities, U.S. Select, and various international small cap and value strategies. We believe diversification across fixed income and quality-oriented equities can help clients generate income, stay invested, and broaden their sources of return beyond a handful of market leaders leveraged through the AI build-out. Now, turning to slide six. Retail activity softened during the quarter as investors remained selective amid higher market volatility. Tax example is a bright spot with our municipal strategies continuing to gain share against a very challenging macro backdrop for this asset class. While active equity and taxable fixed income redemptions remained elevated, we continue to see encouraging demand for ETFs, SMAs, and thematic strategies, reflecting the benefits of a more diversified retail platform. As we've discussed before, clients increasingly want access to the same investment capabilities through the vehicles and formats that best fit their financial objectives. Our broad products set positions as well to meet that demand across mutual funds, ETFs, and managed account solutions. Moving to slide seven, I'll cover our institutional channel. Institutional net inflows reached a record of nearly 16 billion in the quarter, making the channel second consecutive quarter of positive flows. As expected, commercial mortgage loans were the primary contributor, accounting for approximately $12 billion of inflows. Importantly, flows were positive, excluding CML, supported by a broad demand across fixed-income passive equity and other alternatives and multi-asset solutions. Alternatives and multi-assets generated more than $13 billion of net inflows and remained organically positive for the seventh consecutive quarter. Pipeline conversions continue to accelerate as we gain scale. During the quarter, we funded nearly $5 billion in previously awarded mandates, in addition to the CML mandate. Institutional engagement is still healthy, with $13 billion in pipeline AUM at quarter end, notably excluding the expected $100 billion of core bridge opportunity. More broadly, these results reinforce the strategic progress we're making in insurance asset management in private markets. The successful onboarding of CML demonstrates our ability to originate, manage, and service large-scale private assets while further strengthening the flywheel between long-duration insurance capital and AB's alternatives platform. Turning to slide eight, I'll cover Bernstein Private Wealth. Private wealth continued to live at resilient net new asset growth despite a volatile market backdrop. While third quarter net flows were negative, we continued to grow net new assets at a 2% annualized rate as of the third quarter and 4% over the last 12 months. Importantly, approximately $500 million of this quarter's net outflows resulted from rebalancings and are being redeployed back into the platform during the fourth quarter. Client demand continued to favor alternatives and passive equity with more than a billion dollars in net inflows into alternatives and approximately 300 million into direct index equities. At the same time, newly launched alternative strategies gained further traction, raising approximately 600 million during the quarter. Bernstein Private Well's value proposition continues to strengthen. Clients are seeking integrated advice spanning public and private markets, tax, estate planning, and charitable solutions, and our platform is uniquely positioned to meet those needs. As a result, we continue to add new relationships at a strong rate in the ultra-high net worth global families and family office segments across market cycles. We have generated consistent net inflows for five consecutive years, reflecting the durability of our model. The fourth quarter is already shaping up to be strong, and we're optimistic about our momentum heading into next year. Beyond flows, Bernstein Private Wealth is one of our most important strategic assets. The business sources more than one-third of firm-wide revenues while representing less than one-fifth of firm-wide assets, highlighting the strength of its advice-led model and our differentiated farm-to-table distribution of asset management capabilities. I'll now turn to slide nine, which highlights the continued growth and diversification of our private alternatives platform. I'm pleased to report the private market AUM now exceeds $105 billion, surpassing the $90 to $100 billion target more than a year ahead of our original 2027 commitment. This milestone reflects years of disciplined execution and the successful build out of a diversified platform spanning private placements, direct lending, alternative credit, and commercial real estate lending. Importantly, the growth is broad-based across institutional, insurance, private wealth, retail clients, reflecting a diversified and growing demand for long-duration assets. We also see significant runway ahead. Commercial real estate lending now exceeds $20 billion following the successful onboarding of nearly $12 billion of commercial mortgage loans from Equitable. 10 years ago, AB managed less than $20 billion of private assets firm-wide. Today, each of our four private markets platforms is larger than our entire private markets business was then. This scale is increasing at competitive advantage. Larger platforms support stronger origination capabilities, deeper client relationships, and provide access to a wider range of investment opportunities, creating a flywheel that reinforces our sustainable growth over time. Turning to slide 10, this illustrates what we believe is AB's most important competitive advantages. Our ability to source and manage retirement assets through both accumulation and decumulation phases by connecting private and public markets, insurance and wealth management in a single retirement ecosystem. Historically, these markets operated independently. Today, they are increasingly converging, creating opportunities for firms of broad capabilities and multiple distribution channels. Through our private wealth business, retirement platform, SMAs, and active ETFs, we help clients accumulate assets. Lifetime income solutions and insurance products help convert savings into durable retirement income. These long-duration liabilities create demand for differentiated private market assets. Thank you so much for joining us. The combination of Equible and Corbidge will further strengthen this ecosystem. Approximately 100 billion of Corbidge assets will be onboarded over time, providing greater scale to support asset origination, innovation, and the development of new investment capabilities. We believe insurance, retirement, wealth management, and private markets represent some of the largest and fastest growing pools of capital globally. Increasingly, AB's differentiation arises from being at the intersection of these opportunities, combining investment breadth, customization, direct client relationships, and long-duration capital in ways that are difficult to replicate. Now I'll pass it to Tom to review our financial results. Tom?