Rising Equity Markets Have Improved AllianceBernstein's Fortunes, but Secular Headwinds Persist

A confluence of several issues—poor relative active investment performance, the growth and acceptance of low-cost index-based products, and the expanding power of the retail-advised channel—has made it increasingly difficult for traditional asset managers running predominantly active portfolios to generate organic growth, leaving them more dependent on market gains to drive growth in their assets under management. While we believe there will always be room for active management, we feel that the advantage when it comes to getting placement on platforms will go to those asset managers that have greater scale, established brands, solid long-term performance, and reasonable fees.