AllianceBernstein Holding LP (AB) 2006 Q3 法說會逐字稿

Thank you for standing by and welcome to the AllianceBernstein third quarter 2006 earnings review conference call.

[OPERATOR INSTRUCTIONS]

I would now like to turn the conference over to the host for this call, the Director of Investor Relations for AllianceBernstein, Mr. Phillip Talamo. Please go ahead.

Thank you, Christian. Good afternoon, everyone. Welcome to our third quarter earnings review.

As a reminder this conference call is being webcast and is supported by a slide presentation that can be found on our website at alliancebernstein.com. Presenting our quarterly results today is Gerry Lieberman, President and Chief Operating Officer, and Lew Sanders, Chairman and Chief Executive Officer. Bob Joseph, our CFO, will also be available to answer questions at the end of our formal remarks.

I would like to take this opportunity to note that some of the information we present today may be forward-looking in nature and as such is subject to certain SEC rules and regulations regarding disclosure. Our disclosure regarding forward-looking statements can be found on page 2 of our slide presentation as well as in the Risk Factor section of our 2005 form 10-K. In light of SEC regulation FD, management will be limited in responding to inquiries from investors and analysts in a non-public forum; therefore, we encourage you to ask all questions of a material nature on this call.

At this time I would like to turn our call over to Gerry Lieberman.

Thank you, Phil, and good afternoon to everyone on the call.

Well, optimism certainly returned to the financial markets globally in the third quarter as both equity and fixed income markets had strong performance results. Quarterly returns ranged from 380 to 620 basis points for the Lehman Aggregate. Russell 1000 growth and Russell 1000 value, S&P, MSCI World, EAFA and emerging markets indices.

Meanwhile, our relative investment performance for the quarter and our most important value equity services were once again better than their relative benchmarks. Performance in our growth services continued to lag and our institutional fixed income services were clustered around their respective benchmarks.

Regarding organic growth, we are reporting approximately $23 billion for the quarter's gross flows and 8.3 billion of net inflows. Down from the second quarter's record highs, as we discussed on our last call in July, but a solid $48 billion or 9% in organic growth for the 12 months ended September.

From a financial performance perspective, operating partnership net revenues were up 17.5% versus last year, to $935 million. And net income was up by more than 19% to $253 million. AllianceBernstein Holdings, the publicly traded partnerships, net income and distribution per unit were $0.87, up 17.6%.

Having covered four quarterly highlights, capital markets, relative performance, organic growth and financial performance in less than two minutes, let's take a closer look at the details.

I'll start with U.S. capital market performance. As shown on display four, you'll see that all four reported indices were up significantly in the quarter, in sharp contrast to the second quarter. It was just three months ago when stocks were slumping as investors feared that an overheating economy would force the Federal Reserve to raise interest rates to stifle growth. Today, inflation fears are easing amid falling commodity prices and a cooling housing market. In short, an investor's worst fears did not materialize and the markets rallied.

On display five, you'll see that non-U.S. capital markets also showed a strong rebound against a backdrop of a weak second quarter with robust returns for the three-month and 12-month periods.

Now that I have reviewed capital market's performance, let's turn to display 6, and I'll review a summary of how we performed for our clients. You can also reference displays 33 through 42 later for more detail on these important leading indicators. Our relative investment performance for the quarter was somewhat mixed, but we did see pockets of strength in our value equities and our fixed income services.

With respect to our institutional value equity services, except for emerging markets, all services outperformed their benchmarks for the quarter. For longer periods we remain very competitive as our international value, global value, and emerging market value returns were excellent for the three, five, and even 10-year periods with Alpha ranging from 350 to 620 basis points. For the quarter institutional growth equity services underperformed benchmark in nearly all of our key services. However, longer period three and five-year returns, most important to the consultant community and clients alike, remain generally competitive, and as we mentioned in our press release, we still believe that we are well positioned to capitalize on the opportunities present in the growth sectors of the equity markets.

Similar to last quarter, our blend services continued to underperform their benchmarks as a result of the poor relative returns in the growth sleeve of their respective portfolios. However, they have much more competitive longer period returns, benefiting from the strong performance of their value sleeves. And, as I will discuss later, our blend services continue to account for a significant amount of our new institutional mandates.

Finally, our performance for the quarter and institutional fixed income had benchmark-like returns, while our retail fixed income funds generally outperformed their Lipper peer groups. Our American income, global government income, and corporate bond funds all handily beat their respective Lipper peer groups by 90 to 260 basis points. As we all know, past performance is no guarantee of future results, but performance is arguably the most important data set used by both current and prospective clients as well as consultants to evaluate how we're doing. It can also be a leading indicator of future net new flows for the firm.

We believe our broad array of investment services and our long-term investment performance through various market cycles, as shown on display 7, leave us well positioned for asset growth.

Now, let's turn to display 8 for our summary analysis of assets under management by distribution channel for the three months ended September 30, 2006. Here you'll see just how significant our growth in assets on the management was for the quarter. Total AUM grew 5.5% in just three months thanks to strong investment returns and net inflows, with AUM increasing over $34 billion to approximately 659 billion. Net flows for the quarter were 8.3 billion consisting of 5.7 billion in Institutional Investments, 1.4 billion in Retail and 1.2 billion in our Private Client channel. 245 Institutional Mandates were funded in the quarter adding $11.1 billion of AUM to our Institutional Investments channel. For our Retail channel, it was the fifth consecutive quarter of net asset inflows. Our Private Client channel recorded net asset inflows of 1.2 billion driven by almost $3 billion in gross asset flows. This marks the 23rd consecutive quarter of net asset inflows for this channel.

Display 9 shows changes in assets under management by channel for the 12 months ended September 30th, 2006. Total AUM increased by $104 billion or 18.7% for the 12 months. Results of strong net inflows of over $48 billion an [inaudible] performance of over $56 billion. Recorded gross sales of over 104 billion. Nearly matching the record set in June of 2006 for a trailing 12-month period. Net inflows by channel consist of $30 billion, Institutional Investments, 10.9 billion in Retail and 7.2 billion in Private Client.

Display 10 shows a summary of changes in AUM by investment service for the three months ended September 30. For the fifth consecutive quarter, we have positive net inflows in our growth equity, value equity and fixed income investment services. Net fixed income inflows exceeded $2 billion for the first time in almost two years. And exceeded 1 billion for the fifth consecutive quarter as we experienced increased interest in our fixed income services.

Turning to display 11, you can see that for the 12 months ended September 30, value equities again lead the way with over 48 billion in gross fundings and 27.6 billion in net inflows, the gross figure is the seventh consecutive record for a trailing 12-month period. In addition, the market appreciation for our value services was nearly 41 billion for a total increase of over $68 billion in 12 months. Inflows for growth equities were strong with 35.5 billion in gross inflows and 17 billion of net. While fixed income services experienced net inflows of more than $7 billion.

Let's turn to display 12 where I'll start my detailed discussion of our distribution channel highlights beginning with our Institutional Investments channel. At September 30, 2006, our Institutional Investments channel assets accounted for 63.4% of our overall AUM or $418 billion. The 5.5% quarterly increase in Institutional AUM was driven primarily by market appreciation of $16 billion, while net inflows were nearly 6 billion.

Our value and blend strategy equity services accounted for roughly 85% of all new assets, while global and international services comprise roughly 80% of funded mandates in the quarter, a continuing trend. Our pipeline of one with unfunded mandates increased during the quarter and is widely diversified in terms of client domicile and client type.

Turning to display 13, you can see that our Retail assets under management are up 8 billion to $154 billion or 23.3% of our total AUM. Market appreciation accounted for most of the increase in the quarter but net flows and market appreciation were nearly equal for the 12 months, adding 23 billion or 16%. Wealth Strategies, our important suite of asset allocation services experienced growth of more than 18% reaching 7.7 billion in AUM this quarter.

The U.S. component grew by almost 12% during the quarter to $4.8 billion and the non-U.S. component, global wealth strategies, grew by more than 27% to 2.9 billion in assets. During the quarter, Morningstar awarded five out of six of these services four or five stars. Our CollegeBoundfund is ranked No. 1 in three-year performance by savingforcollege.com, a leading authority on Section 529 college savings plans, as our 529 balances grew to over $7 billion.

Display 14 shows our Private Client channel highlights. Here you can see that our high net worth channel represents 13.3% of our total AUM with $87 billion in assets. This channel's assets are up just over 19% versus September 30, 2005, the result of net flows and market depreciation.

We continue to invest in our Private Client business as we increase the number of financial advisors by 37 to 291, a 15% increase over the past 12 months.

Highlights for Institutional Research Services are shown on display 15. On a GAAP basis, revenues totaled 88 million for the quarter, a decrease of 3.6% from a year ago. However, as shown in the appendix on display 43, after accounting for our reclassification of advisories fees for the third quarter of 2005, Research revenues actually increased, albeit by only 1% quarter over quarter but over 20% for the nine months. I should also point out that our clients' use of our algorithmic trading platform in the U.S. continues to grow, and we are on schedule to launch an algorithmic trading platform in Europe in early 2007.

As I'm sure many of you are aware, Institutional Investor released their latest poll just last week, and we're proud to say our firm had our best year ever. Highlights included nine analysts who were voted No. 1 in their sector. We had analysts placing in the top 3 in 18 sectors, which surpasses last year's previous best ever, 15. And firm wide, we placed top 10 in II's lead table for the third consecutive year.

In summary, we're pleased with the progress we have made in each of our four distribution channels, and we're excited about the challenges and the opportunities that lie ahead. Before I begin my review of financial results, I would like to highlight briefly, as I have done in previous quarters, the diversity of our assets under management. Turning to the center pair of pie charts on display 16, you can see we currently have 71% -- 74% of our $659 billion of total AUM in equities versus 71% a year ago and we still managed $173 billion in fixed income securities.

Looking at the two other sets of pie charts, you'll notice that our firm's business has continued to become increasingly global. The pair of pie charts on the left side of the display show that AUM of our non-U.S. domiciled clients increased by 36% from September 2005 to $226 billion, compared to the firm's 19% increase in total AUM. The right side of the display illustrates that over the past 12 months our assets in Global and International Investment services grew by 40% from 239 billion to $335 billion.

As Lew noted in the press release, our Global and International services account for 51% of the firm's total assets under management. The first time that our U.S. services did not account for the majority of our AUM. And finally, the pie charts on display 17 show how diversified we are in terms of investment services and highlights the importance of our Blend Strategy services, where we utilize our growth and value equity services in a 50/50 mix and rebalance these sleeves in a disciplined and systematic process. Our Blend Strategy services offered in U.S., non-U.S., and global constructions held $116 billion at quarter end.

Now that I have provided some highlights on performance, asset flows, key trends in our distribution channels, and our mix of AUM, let's turn to our firm's financial results starting on display 18. Net revenues for the quarter increased 17.5% to $935 million compared to 795 million in the third quarter of 2005, with investment advisory fees up 24.3%, or $132 million.

On display 19, we detail advisory fees by type and by channel. Base fees were up 23.6% or $120 million to 265 -- 665 million for the quarter. The increase was attributable primarily to higher AUM in all three channels, as well as the favorable mix to non-U.S. and equity services.

Moving to the lower half of the display, we show advisory fees by distribution channel. Here you can see the 32.2% increase in our Institutional Investments channel where we experienced higher AUM, a positive mix change, and where most of this quarter's performance fees were earned. Private Client and Retail advisory fees grew 21.8% and 16.3% respectively during the quarter as both benefited from higher AUM.

Now that I covered revenues, let's turn to expenses, which are summarized on display 20. The growth and operating expenses of 15.3% for the quarter was below that of net revenue despite certain facilities related spending which will modestly increase our run rate. The 14.8%, or $49 million increase in employee comp and benefits represents more than one-half of the year-over-year increase in total expenses.

As shown on display 21, base compensation is up 16.9% versus last year as we increased head count by more than 11%, or 487 staff members, to 4,738 at quarter end. We increased head count in operations in response to the growth of our business. Private Client, as an investment to grow this franchise. Technology, to upgrade and improve our technical functionality and retail to increase our sales coverage.

The increase in incentive compensation of 5.1%, which is significantly less than our earnings increase, is attributed to an increase in deferred compensation investing from our December 2005 [inaudible], while cash IC accruals for 2006 remain relatively flat as we reduced our estimates for this year's year-end bonus payments. Commission expense increased 24.4% with Private Client, Institutional Investments, and Retail accounting for most of the increase.

As I mentioned last quarter, growth and commission expenses are actually a leading indicator for future revenue and earnings increases. That's because the full impact of new business isn't reflected in the current P&L while commission schedules are generally front loaded in the first year.

Turning to display 22, you can see that G&A increased $38 million. Increased occupancy cost, primarily in the U.S. and England to support our head count increases mentioned earlier, higher volume related data processing costs, and $7 million in expense recoveries last year were the major contributors of this variance.

As I wrap up my comments, please turn to display 23, where we present a recap of total revenues and expenses that come to a summarized income statement for AllianceBernstein. Here you can see that our pre-tax operating income increased by 23.5%. Our operating margin expanded by 140 basis points, to 28.9%, and our net income rose by 19.4%. The growth in net income was lower than the growth in operating income due to the gain on the disposition of our mutual funds with India in the prior year's quarter. The disposition reflected as a non-operating income item.

Carrying the 253 million of AllianceBernstein's net income forward to display 24, we show AllianceBernstein Holding's financial results. Holding's equity share of AllianceBernstein's earnings were 82 million for the third quarter versus $65 million in the same quarter last year with net income of $74 million or 22.2% better than '05.

As I mentioned in my opening remarks, our distribution per unit for AllianceBernstein Holding will be $0.87 per unit, nearly 18% higher than the $0.74 distribution in the same quarter last year.

In summary, this was a good quarter for our firm on many fronts. Strong market returns, our continued success in generating organic growth drove a significant increase on our assets under management. Importantly, we continue to increase our AUM and Global and International Investment services, improving our fee realization and a better mix of investment services, and we continue to invest for future growth by improving earnings quality and distributions for our unit holders. Finally, our longer-term investment performance continues to benefit our clients.

Now, I'll turn the call over to Lew.

Thank you, Gerry.

Before we take your questions, I want to take a moment as I have in prior conference calls to focus your attention on elements of the firm's strategy that we see as important. Last quarter, you may remember, we talked about our strategy in defined contribution plan. In this call I want to describe our position and plans in hedge funds. Hedge funds offer us a natural extension of our core competency as active managers of equities, fixed income, currency, commodities, and asset allocation strategies.

There are means to isolate and amplify these Alpha sources while at the same time assembling them in services that have the potential to produce high information ratios and be highly tax efficient. Our emphasis here, it's worth stressing, is not in response to the surge in popularity of hedge funds in recent years. Indeed, it wouldn't surprise us if industry growth slows, perhaps even sharply, in the period ahead. And it has nothing to do with holding on to talented professionals who might otherwise be drawn to join competing firms. Instead, our interest is driven entirely by a desire to bring the most advanced services that we can to clients, and hedge funds provide the flexibility and format to do so.

As you can see in this next display, our current product array spans the risk returns spectrum from very low volatility services on the left of this picture to those with substantial equity driven data on the right. Client interest has been highest in the middle in a set of diversified services offered in multiple flavors of risk and return. All of these services call on the firm's main stream investment disciplines and are tightly coupled to them. Investment performance has been generally excellent with returns exceeding relevant benchmarks by many hundreds of basis points.

Note too that in services designed for taxable clients, we have met our objectives of minimizing current tax obligations while producing pretty strong absolute investment returns. We continue to innovate in this space with the newest and most advanced hedge fund offerings composed of five distinct Alpha sources including long-short currency, fixed income, commodities, long-short equity, and variation in equity exposure. Alpha sources, it's important to note, that have little or no correlation with one another as the following display makes clear. Our optimization tools systematically compare the risk and return potential of each of these Alpha sources, sets exposure to each accordingly, and thus rebalancing is an integrated and, importantly, dynamic feature of this architecture.

Moreover, our research indicates that the return stream from these services will be largely unrelated to capital market trends, enhancing their appeal as a source of both return and diversification. Thus, we believe we're very well positioned in this space. Few firms, as we see it, can replicate the integrated rebalancing and tax optimization features of our diversified funds. Moreover, we're capable of tuning these services on a separate account basis to meet the particular risk return base of clients, which could prove to be an important feature in some parts of the market.

Finally, and also importantly, as compared to many competitors our fee structure is lower, thereby delivering greater value to the client. To develop this business more broadly we have created a strategic business unit focused exclusively on hedge fund services with control over product design, marketing, client service, and operational support. It's leadership consists of AllianceBernstein heritage people who have been with us in other roles for a long time. As in other areas of the Company, we have no plans and really see no need to do acquisitions and will instead build our presence in this space organically.

At present, the majority of assets under management and hedge fund derives from private client relationships, typically as part of investment plans utilizing multiple services. As we look ahead, however, we think institutional clients will become a more important part of this business, reflecting their growing interest in investments of this type and, of course, our heightened efforts to reach and to serve them. It's worth adding too that we're already an important factor in this business with some 6.5 billion under management, a figure which, as you can see in the display, has been growing quite strongly.

Since we see these services among our most competitive, we will anticipate continued rapid growth in the period ahead. Now if we meet our return targets for these services, the effect on the firm's financial performance will, of course, be favorable, as they are all performance fee and design. This will have the derivative effect of making our earnings more seasonal as the measurement period for returns is typically skewed to the fourth calendar quarter. An effect worth keeping in mind as you make forecasts of our results in the future. Thank you now for your questions.

[OPERATOR INSTRUCTIONS] Your first question comes from Bill [Cats] of Buckingham Research Group. Please go ahead.

Thank you and good afternoon. Gerry, I was a little curious to your comments that you reduced the investment comp accruals, I guess, against a backdrop of pretty strong underlying operating resolves and relative returns. I was just wondering if you could walk me through sort of the strategy and thinking behind that.

Bill, I think the way you should see this is that for the full year we anticipate that our incentive comp pools will be up very substantially and will provide all of the incentives we need to remain competitive with our professional staff. Another way to see, is this is some operating leverage available us to at this point in our development.

Second question is, just sort of curious on the Private Client side it looks like you added about 11 FA's this quarter from the second quarter. Just interested, where are we in terms of a productivity cycle of that business if you will? You have added a significant amount of FA's over the last couple of years. Are we at the point now where we could continue to see a bit of a ramp production pro FA, or are we still sort of in a catch-up mode if you will, you continue to add people and you don't really get they full effect yet?

As we have discussed in the past, this is really a class-by-class situation, so that, as you know, most of the investment we have made in the last two years, these are still young and inexperienced financial advisors, so this is still on an average basis us investing in the franchise and we're still a year or two away from realizing significant asset productivity from those advisors. With that said, the productivity of our experienced advisors has actually been increasing fairly significantly. Generating the growth in the franchise we have seen in the last few years.

Thank you.

Your next question comes from the Miss Cynthia Mayer of Merrill Lynch. Please go ahead.

Hi, good afternoon. Wondering if you could help us think about the performance fees for 4Q it seems like your greatest growth in the last year had been in the institutional channel and, within that, the value and global and international services, which also happens to be where the outperformance is greatest this year. So, does that mean that you're likely to exceed last year's 4Q performance fees by quit a bit?

Cynthia you want to tell us how the markets will do between now and December and I can give you some assumptions.

Okay.

I mean, we estimate this on a very regular basis, but there's just so much uncertainty between now and the end of the year. But if you go back to Lew's slides and look to see and observe how we have increased the franchise, then hopefully we perform for the clients then you should see an increase in performance fees. But both relative and absolute returns can change so much with two-thirds of this quarter to go, if you can estimate-- we all estimate it, but I don't know what the probability is that you can be better, or we're going to be better than you.

Okay. And wondering if you can quantify the pipeline that you said is booked, but the money is not yet in.

Yes, it's over where it was last quarter, but not as high as the record numbers we had in the second quarter.

Okay.

We're starting to see more activity. We're starting to win our fair share, so we are seeing an increase, but it's not where-- it's not where we peaked two quarters ago.

Thanks.

Your next question comes from Christopher Spahr of Prudential, please go ahead.

Good afternoon. I just wondering if you can comment on the tax rate. Second quarter you noted it was a lower tax rate outlook for the year. Now it seems to be a bit higher. Wondering what the outlook for the fourth quarter is and if you can also talk about maybe the '07 tax rate as well.

I thought we tried to explain this last quarter. Let's-- let's try again. If I were you, I would think of our tax rate somewhere between 6 and 6.5% for the year. What happens quarter to quarter is you are reforecasting how you're going to do for the year and you are not only adjusting the number for the quarter but making up what happens in the previous quarters. But if you look historically we're between 6, 6.5. To use a range based on what we know today, I think that would a pretty good range to use.

Thank you.

Your next question comes from Marc Irizarry of Goldman Sachs, please go ahead.

Oh, great. Thanks. My first question just touches on performance fees again. Can you give us maybe some color on what percentage of your assets under management are currently under performance arrangements? Thanks.

Mark, I'm embarrassed. I don't know. I mean, we have the 6 billion in hedge funds, we also have other services long-going services that have performance here. We have some institutional clients that they'll prefer lower bases and use performance fees. I'll have to go back and get that number. Maybe we're discuss it in the next quarter when we're explaining what happened to our performance fees in the fourth quarter.

Okay. Great. Thanks.

[OPERATOR INSTRUCTIONS]

Any further questions, Christian?

Your next question comes from Niamh Alexander of CIBC, please go ahead.

Thanks so much. Can I just ask you guys how how if any of you are seeing opportunities from liability driven investment? We're just increasingly headlines about public and private pension plans and gearing towards this? And what are the opportunities for AllianceBernstein here? Thank you.

Interesting that you raised that point. We have taken what was initially our style blend group, expanded its mission into something we describe as Blend Strategies, which includes alpha beta separation as key product objective. As we see it that market today is still quite small and confined to the very upper end of the institutional market. It does look as if it has has meaningful potential. It is really the leading edge, if you will, of innovation and investment management. And we do feel as if we have a lot of bring to the table by way of capability in that domain.

So, we're hoping that this actually will develop into a meaningful business for us, although at this point, it's in the developmental stage.

Okay. That's helpful. Thanks. That was my question.

We have a follow-up question from Miss Cynthia Mayer of Merrill Lynch.

Thanks a lot. I'm just wondering if you could talk a little more and institutional research services and the Pan-European clients. Was this a loss in market share or a temporary blip, and if it was a loss in market share of some kind was it due to some particular kind of a fee composition or a different kind of a service?

We just think it's a blip. I mean, as you know in your business, there's nothing seasonal or predictable from a quarter to quarter on how you collect these commissions. So, we don't see anything here that is structural in nature or change in the basis of the business or any trend here at all. But it was disappointing-- it was a disappointing quarter.

Okay. Thanks.

We also have a follow-up question from Mr. Bill Katz from Buckingham Research Group. Please go ahead.

Okay. And thanks for the patience. Pretty tactical nature if you look at your other expenses within promotion and servicing, that fell substantially sequentially, I just sort of curious is that just a function of seasonality in the weak markets or is that a new run rate we should be thinking about? And the second question, just sort of curious, Lew, I think I know your answer, but I'd like to hear it again anyhow, as you think about building out this sort of hedge fund strategy, if you will how does that-- or what kind of sort of back office or compliance risks does that bring with it?

Bill, the only thing that drops in promotion and servicing, and it has been for a couple of years, is the amortization of sales commissions. That's the only thing that has been going down. The pure promotion and the expenses that we're incurring in promotion, they have been going up, actually gradually, both in the U.S. and outside the country, but we still have about a year left to go in regards to a contribution to our margin from this amortization of the first sales charges going back to prebubble.

Bill, on part B operational support for hedge funds, actually it's a very insightful question, because these services are far more complex than straight long services especially those that employ multiple sources of alpha, and they indeed are the best, because they engage in the use of any number of derivative contracts on assets-- underlying assets here and everywhere.

So, the operational support required to ensure the integrity of these services is really far, far larger than a typical straight long operational objective, which is why when we formed this unit, we built into it a team, actually lead by among one of our strongest executives in this space. We built a team that we believe is up to the task of putting in place all of the operational infrastructure we require. And I can report to you that we feel pretty good about what has been accomplished already.

If I could just follow-up then just your observation that there's operational leverage in the model still, is that inclusive of what you might be doing to support this initiative?

Oh, for sure. The way to think about this initiative, Bill-- I tried to stress this in my remarks, is that hedge funds for us are really a derivative of a research infrastructure that, as you know, is already highly elaborated. It's a mechanism that harvests the Alpha generating capability of that commitment.

It's in a position to amplify it and then repackage it in ways where you can drive the information ratios up from that intellectual capital that you have long had in support of your straight long services. So, there's no doubt that there's operational leverage in this. If you deliver on the promise of performance. And of course, because their incentive fee and design, that leverage can be substantial if the performance objectives are actually met.

Okay. Thank you very much.

There appears to be no further questions. Once again I will turn the floor over to the speakers for any closing remarks.

Thank you everyone for participating in our conference call. If you have any further questions feel free to contact Investor Relations at any time. Enjoy the rest of your evening.

This concludes today's AllianceBernstein conference call. You may now disconnect.