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AllianceBernstein Holding L.P. (AB)
Q1 2010 Earnings Call Transcript
May 3, 2010 5:00 pm ET
Philip Talamo – VP, Director, IR
Peter Kraus – Chairman and CEO
David Steyn – COO
John Howard – CFO
Craig Siegenthaler – Credit Suisse
Robert Lee – KBW
Bill Katz – Citigroup
Michael Kim – Sandler O’Neill
Cynthia Mayer – Bank of America
Previous Statements by AB
» AllianceBernstein Holding L.P. Q4 2009 Earnings Call Transcript
» AllianceBernstein Holding L.P. Q3 2009 Earnings Call Transcript
» AllianceBernstein Holding L.P. Q2 2009 Earnings Call
Thank you, Julia. Good afternoon, everyone. And welcome to our first quarter 2010 earnings review. As a reminder, this conference call is being webcast and supported by a slide presentation that can be found in the Investor Relations section of our website at www.alliancebernstein.com/investor relations. Presenting our results today are our Chairman and Chief Executive Officer, Peter Kraus; our Chief Operating Officer, David Steyn; and our Chief Financial Officer, John Howard.
I would like to take this opportunity to note that some of the information we present today is forward-looking in nature, and is subject to certain SEC rules and regulations regarding disclosure. Our cautionary language regarding forward-looking statements can be found on page two of our presentation, as well as in the MD&A section of our 2009 10-K. In light of the SEC's regulation FD, management may only address inquiries of the material nature from the investment community in a public forum. Therefore we encourage you to ask all such questions on this call. Now, with that, I’ll turn the call over to Peter.
Thank you, Phil. This afternoon, we'd like to talk a little bit about performance in slightly different way than we traditionally do. You'll find in the presentation that the appendix pages 21 to 24 our traditional presentation for performance, which shows you first Q – first quarter performance for value growth fixed income and also shows you annual performance for each of those services in the traditional manner.
What we have talked about, I guess, quite consistently over the last year with regard to our businesses and our services, is some of the significant performance that we experience in 2008, and the impact that that's had on the business. So we decided to show you in this quarter was peak-to-trough performance that is October, excuse me, October 9, 2007, which is the peak through March 9, 2009, the bottom i.e. the trough and then March 9, 2009 through March 31, 2010, so showing the relative outperformance and the relative underperformance.
We recognize that our clients do look at our performance overtime, they do, actually, look at how much our outperformance has out run our underperformance and this is another way for us to explain to all of you why we are confident about where we’re going in the future.
So if you look at the first page, which shows you Lipper Percentile Ranks, which is different then the institutional rankings in precise amount but not in directional – not from a directional point of view. You'll see for global value, international value and the U.S. value, the bottom diamond, which reflects the peak-to-trough underperformance and the relatively poor competitive rankings.
You'll see then the trough to present rankings for the same services as being at the top decile or top quartile performance or in the U.S. value almost top third at 34%, and those performances are actually quite attractive and you can see what the actual numbers are below those bars.
Similarly, you can see for growth essentially the same kinds of performance for GRG, which is the first bar, international growth and small and mid-cap growth. And last, you can see those performances for the bond strategies, which are for global bond, the high income strategy, where we’re really doing quite well at the fifth percentile and you mean, innovate diversified muni portfolios, which actually are switched and that’s exactly what we want from that performance, which is the service outperformed in the tough times and the services underperforming in obviously the recovery, because we’re looking for, conservatively well managed diversified municipal portfolio and that is exactly what we've got.
So, as a punch line here is that, we feel pretty good about the performance from the bottom to the present. The outperformance across the services is pretty consistent with the exception of municipal activities, which is as we said is as we have designed and that makes us feel more optimistic about what our clients are likely to do with regard to allocating capital to us going forward. And what prospects are likely to do in allocating capital to us going forward.
Our Q1 performance, as I said, is in the appendix pages 21 to 24 and for the first quarter, we had averaged to in some cases below average performance. But as I say, that is one quarter and we don't think that is going to change the trend that I’ve just articulated.
Let me move to net flows by investment service for the quarter, which is on page seven. There you can see substantial inflows in the fixed income area, better than anything we've seen since the first quarter of ‘09 at $5.2 billion, continued outflows in both value and growth, although for value at a significantly lesser level and for growth at a reasonably consistent level from the last two quarters.