AllianceBernstein AUM falls 12% in Q2, while net revenue drops 12.1%

AllianceBernstein Holding reported assets under management of $646.8 billion as of June 30, down 12% from three months earlier, and down 12.4% from a year earlier.

Total net outflows amounted to $2.7 billion in the second quarter, compared with net inflows of $11.4 billion in the first quarter, and net inflows of $6.2 billion in the second quarter of 2021, AB said in an earnings release Friday.

By asset class, active equity, tax-exempt fixed income, passive fixed income and alternatives/multiasset saw net inflows of $300 million, $900 million, $700 million and $1.4 billion, respectively, in the second quarter. Meanwhile, passive equity and taxable fixed income saw net outflows of $300 million and $5.7 billion, respectively, in the second quarter.

Institutional net inflows totaled $700 million in the second quarter, down from net inflows of $10.2 billion in the previous quarter and net inflows of $900 million in the year-earlier quarter. AB noted that the first-quarter net inflows "reflected a large $9.6 billion custom target-date mandate."

Retail had net outflows of $2.2 billion in the second quarter, compared with net outflows of $1 billion in the first quarter, and net inflows of $5.2 billion in the second quarter of 2021.

Private wealth recorded net outflows of $1.2 billion in the quarter, compared with net inflows of $2.2 billion in the previous quarter, and net inflows of $100 million in the year-earlier quarter.

Seth P. Bernstein, president and CEO of AB, described the overall second-quarter net outflows as "moderate" in the earnings release, noting that "taxable fixed income outflows were partially offset by continued organic growth in municipals, alternatives/multiasset and active equities."

Mr. Bernstein added in the release that retail sales in the second quarter "continued to moderate from record 2021 levels, reflecting weaker markets."

Net outflows in the private wealth segment in the second quarter were "driven by tax payments on 2021 capital gains," , Mr. Bernstein said in the release.

AB also reported GAAP net revenues of $971 million in the second quarter, a 12.1% drop from the first quarter and a 9.8% decline from the year-earlier quarter.

AB attributed the year-over-year decrease in net revenue to "investment losses in the current year compared to investment gains in the prior year, lower performance-based fees and investment advisory base fees."

The quarterly decline in net revenues was "due to lower performance-based fees, investment advisory base fees, distribution revenues, Bernstein Research revenues and higher investment losses, offset by higher net dividend and interest income," AB added in the release.

In a conference call with analysts Friday, Mr. Bernstein said "our second-quarter results reflected adverse market conditions as a negative market sentiment was amplified by a sharp decline in asset prices in the quarter."