Launch Of Real Estate Alternatives To Further Boost AB’s Flows

Analysts at Citigroup maintain their "buy" rating on AllianceBernstein Holding LP AB, while reducing their estimates for the company. The target price for AB has been reduced from $32 to $30. Citigroup says, “Per management all businesses were positive in flows in June after increasingly difficult April/May, with such momentum continuing into 3Q – though there are still some pockets of weakness and mixed relative performance metrics. Institutional (59% of 6/30 AUM) pipeline flattened in 2Q but is up strongly into July on further DC penetration, sustained fixed income traction, building global equities volumes offset by lackluster domestic equities. Retail (25% of AUM) redemptions have flattened considerably, particularly in Europe, sub-advisory run-off is also easing and non-US gross sales are percolating, particularly in Asia/Bonds.” “Private Client activity also seems to be building as DAA sales doubled Q/Q & investors are further re-risking with higher exposure to equities (46% of new money in 1H10 vs. 39%in 2009). 2H10 real estate alternatives launch should further bolster flows/revenues yields, before considering market impact… Management guided toward 49% to 50% comp/revenues (less distribution) ratio for 3Q or between 1Q and 1H10 run rates, suggesting solid expense control despite the recent investments and mostly in line,” the analysts add. Citigroup has lowered its EPS estimate for 2010 from $1.75 to $1.65. More Analyst Ratings here