AllianceBernstein assets up 2.7% for quarter, 5.9% for year

AllianceBernstein (AB) on Tuesday reported $430 billion in assets under management as of Dec. 31, up 2.7% from the previous quarter and 5.9% higher than the fourth quarter of 2011.

Institutional AUM totaled $219.8 billion; retail clients, $144.4 billion; and private clients, $65.8 billion, according to AllianceBernstein's fourth-quarter earnings release.

Total net inflows for the latest quarter were $5 billion, compared to net outflows of $4.4 billion in the third quarter and net outflows of $13.2 billion in the fourth quarter of 2011.

Net institutional inflows were $2.9 billion, compared to net outflows of $7.7 billion in the third quarter. Net retail inflows of $5.3 billion were up from $500 million in the previous quarter, while net outflows for private clients were $3.2 billion, compared to $1.7 billion in net outflows in the third quarter.

“Our $5 billion in fourth-quarter net flows were positive for the first time since the fourth quarter of 2007, and our annual net outflows declined by 77%,” Peter S. Kraus, chairman and CEO, said in a conference call with investors following the earnings release. “We achieved the shift in large part because of our clear momentum in retail throughout the year, but our increasing stability in many other areas contributed as well, so did improving equity markets, which translated to stronger fourth-quarter investment performance.

Net revenues for the fourth quarter were $705 million, down 0.4% from the quarter ended Sept. 30 but up 13% from the year before.

AllianceBernstein's net income for the fourth quarter was $69.4 million, compared to net losses of $48.2 million in the third quarter and $519.9 million in the fourth quarter of 2011.

William Katz, analyst at Citi Research, wrote in a note to clients that the $5 billion in net inflows was about $2 billion below a forecast based on monthly AUM disclosures from AllianceBernstein, but the firm still had annualized organic growth of around 5%. Despite the growth in retail assets, Mr. Katz said AllianceBernstein's approximately 5% annualized growth in institutional assets was “most notable, in our view, given (it) has been an area of greatest runoff recently,” but he added that private client assets are still seeing an approximately 19% annualized rate of decline.