Total AUM in Q4 stood at $646 billion, up $334 billion or 6% from Q4 2022. However, Q4 2022 figures were down $132 billion or 17% when compared to Q4 2021.

The investment manager also reported net revenues of $990 million, down 22% compared to Q4 2021.

Alliance Bernstein reported full year net revenues of $4.1 billion, down 9% compared to that achieved in 2021.

Although net revenues saw a decline, Alliance Bernstein was able to decrease fourth quarter 2022 operating expenses by 10% compared to the same period in 2021.

Global equity and fixed income markets were up in the fourth quarter, but were down for the full year of 2022 – echoing similar declines in fixed income and equity earnings experienced by other peers. 

Read more: Alliance Bernstein weathers storm and bolsters new Equity Capital Markets business

Elsewhere, Bernstein Research Services saw declines in its fourth quarter revenues by 12% compared to the prior year period. This was attributed to a significant decline in customer trading activity across all regions as a result of market conditions.

Full year revenues for the research services division decreased by 8% compared to the prior year. The decrease was driven by significantly lower customer trading activity in Europe and Asia due to local market conditions.

Alliance Bernstein highlighted that in contrast, its wealth division supported performance with a strong year of organic growth. 

“2022 presented an extraordinarily challenging investing and operating environment. Investment returns were adversely impacted by a concurrent decline in equity and fixed income markets, with fixed income posting the worst annual returns on record,” said Seth  Bernstein, president and CEO of AllianceBernstein.

“We enter 2023 with an AUM base 17% below the prior year period, necessitating global cost reduction measures, including headcount reduction, while balancing select growth investments.”

As of 31 December 2022, Alliance Bernstein’s employee headcount stood at 4,436 employees compared to 4,118 employees as of 31 December 2021. However, this figure is a reduction from the investment manager’s most recent headcount peak of 4,490 as of 30 September 2022.

Kate Burke, chief operating officer and chief financial officer, stated that in response to falling equity and fixed income values, and their impact on revenues: “We have taken proactive actions impacting headcount across our global businesses, which will impact approximately 4% of our global employee base.”

The post Alliance Bernstein to slash jobs as Q4 sees AUM drop 17% appeared first on The TRADE.

The sell-side research arm of New York-based investment manager, Alliance Bernstein, has appointed Jonathan C. Biele and Alastair Walmsley to head up its newly launched practice, based in the US and the UK respectively.

However, they join what’s shaping up to be a bloody battlefield. ECM revenues have plunged 75% in Europe (to $21.4bn) and 87% in the US ($29.9bn) so far this year, according to data by Dealogic. That’s in stark contrast to 2021 performance, which saw full year revenues jump 40% in Europe and 20% across the pond.

“Last year was probably the biggest equity issuance year on record or certainly close to it. Wall Street will always hire into a rising tide. When the market is hot you need as many bodies as you can because you need to catch as much as you can. Now suddenly we’re through the first quarter and desks are down around 75%,” Biele told The TRADE.

Some institutions are rumoured to be making significant moves to counteract the suboptimal conditions. Notable was the recent speculation from Bloomberg that UBS could be intending to lay off a large portion of ECM personnel  in a bid to offset a drop in revenues caused by a slowdown in deals across the industry. UBS declined to comment.

On the other side of the coin, Bernstein Research is looking to capitalise on the opportunities created by this wider retreat.

“Because we’re not in this business we can afford to make this investment and play it out. If you’re a more established institution and you’re looking at your pipeline and you’ve made a bunch of new hires and you’re down 80%, people start to worry and they have to adjust accordingly. Most people are trying to swim through it. The risk acceptance is coming back into frame so I think we’ll begin to see more deals.”

According to Biele, the new ECM division at Bernstein Research is unique in its offering as Bernstein has no banking division, which in some cases creates a difficult to manage conflict. Instead, the new practice will offer institutional services from “the deal forward”.

“We’re not going to provide M&A advice or cap structure analysis or leverage models. We want to bring differentiated equity institutional knowledge to the deal process and then support these deals and companies going forward,” he explained to The TRADE.

The division will sit next to existing players in the space and offer its research services to “complement them” instead of competing with them, Biele added.

Bernstein is not the first to bet on a resurgence of revenues in the ECM space. Amundi also announced at the end of last month that it would be launching a new ECM dedicated desk aimed at strengthening banks’ capital markets teams.

The post Alliance Bernstein weathers storm and bolsters new Equity Capital Markets business appeared first on The TRADE.

Blanchard joins from State Street Global Advisors, where he was formerly global head of product, and has previously held senior roles at BlackRock and Vanguard, giving him ETF experience with all three of the big issuers.

Reporting to Onur Erzan, AB’s global head of client group, Blanchard will be tasked with managing and developing a new set of active ETFs for the firm, with the first expected to hit the US market later this year.

It’s a big step for an asset manager that has long resisted the lure of ETFs, and the news has not gone unnoticed. “One of the few remaining ETF holdouts of note, AB, has just hired a global head of ETFs,” tweeted Ben Johnson, director of global ETF research at Morningstar.

“Noel’s a great pick,” added Paul Kim, CEO at Simplify ETFs.

AB launched its first active ETF in Australia in April 2021, and according to Erzan, now plans to accelerate its ETF adoption in other regions.

“Establishing the firm’s first-ever global head of ETFs and portfolio solutions role and adding Noel to the team creates an opportunity for AB to generate an innovative and differentiated offering in a crowded space,” said Erzan. “We are confident that Noel’s leadership will be instrumental to the success of not only our ETF business, launching later this year, but also our broader portfolio solutions including next generation SMAs and model portfolios.”

The post Alliance Bernstein enters ETF space with new hire appeared first on The TRADE.

The post Buy-side pressuring custodians to modernise collateral messaging appeared first on The TRADE.

Exhibition hall at the Fixed Income Leaders Summit 2018, Amsterdam 

The lack of unified, consistent fixed income trade data in Europe is unlikely to be solved through the implementation of a similar system to the Trade Reporting and Compliance Engine (TRACE) operating in the US.

Buy-side speakers at this year’s Fixed Income Leaders Summit 2018 highlighted that while the use of TRACE has increased transparency for North American fixed income market participants, it would be extremely difficult to implement a similar system in Europe due to the fragmentation of regulatory authorities and data sources.

James Wallin, SVP, fixed income at AllianceBernstein, pointed out that TRACE does provide markers for how European markets can improve data transparency and access in the absence of a consolidated tape for fixed income data.

“TRACE is consistent, clear where the data is coming from, readily available to all and there is a decent ability to provide input from market participants into the trade process,” he said.” Unfortunately, the European regulatory environment is much more fragmented, the data dissemination and gathering environment is confused, not only because I don’t think the regulators have a good sense, looking down into the pipe, as to where the data is coming from.”

Wallin also pointed out that while European regulators have created a number of data and transparency-mandates, they are not having the intended effects to benefit the market.

“Europe is well along in terms of mandating transparency, reporting and rules, but the problem is that there is a brick wall due to the inflexibility of the mandate, the mandate doesn’t lend itself to innovation,” he added. “The US is very kind to allowing these kinds of utilities to function as they should, and Europeans can learn from this.”

Alex Sedgwick, head of fixed income market structure at T. Rowe Price, said that while it was important to recognise the improvements to market transparency brought in by TRACE, the different natures of the market structures means it would be difficult to replicate in Europe.

“The one takeaway for Europe is that, generally speaking, there is far more focus on electronic trading and technology throughout the trade lifecycle. In part, that’s a function of MiFID II but I think it pre-dates it in a lot of ways. Having a centralised regulator and single market in the US does make it easier to create a utility like FINRA that collects all of the data in a centralised manner,” Sedgwick said.

The post TRACE-style system unlikely to solve European fixed income data problems appeared first on The TRADE.

The Financial Desktop Connectivity and Collaboration Consortium (FDC3) is led by OpenFin, a provider of application-agnostic operating systems created specifically for finance, which has contributed the source-code to serve as the foundation of the initiative.

Members of the FDC3 include Algomi, AllianceBernstein, Barclays, BGC Partners, BNP Paribas, Citadel, FactSet, Fidessa, IHS Markit, J.P. Morgan, Morgan Stanley, OpenDoor, OTAS Technologies, RBC, RSRCHXchange, Trumid, TP ICAP, and others.

The FDC3 aims to solve problems related to inter-system connectivity where end-users at banks and hedge funds use a combination of in-house and vendor applications, resulting in impeded productivity and increased operational risk.

Mazy Dar, CEO of OpenFin, commented: “Today, the humans sitting at desktops are the integration layer between their applications. We believe the time has come to enable financial desktops with the same app interoperability that we take for granted on our iOS and Android devices.”

OpenFin is open-sourcing its desktop connectivity technology as part of the initiative and providing a central app directory which will be freely accessible and allow applications to identify one another safely and securely.

“Our Corporate and Investment Banking staff can use anywhere between 5-15 applications in their daily workflow”, said Jim Adams, managing director, CIB Technology at J.P. Morgan. “Interoperability would allow this workflow to become seamless across applications and platforms, ultimately making our employees more productive and informed when talking to internal and external clients.”

In February last year, OpenFin raised $15 million in Series B funding led by J.P. Morgan, Bain Capital Ventures, and Euclid Opportunities, the venture funding arm of the NEX Groupm, as well as Venture capital firms Nyca Partners, Pivot Investment Partners, and DRW Venture Capital.

The post OpenFin universal standards initiative draws cross-industry support appeared first on The TRADE.

Fixed income participants are wary the bond market has not improved significantly since the financial crisis, as future stress events could have far-reaching consequences.

Panellists at the 2016 Global Capital Markets Conference in London discussed whether the fixed income market is in a better place now than at the time of the financial crisis in 2008.

James Wallin, senior vice president of fixed income at Alliance Bernstein, explained: “The depth of the bond market is not there anymore and we’ve seen mini-stress since the crisis and we should not feel good about what we’ve seen.”

“We need to replace that pool of liquidity that we lost and we have not solved this problem. With the absence of a safety valve or some kind of relief, a huge stress event could have dire consequences.”

Christine Kenny, managing director at Loomis Sayles Investments agreed and said: “I don’t think the bond market has been fully tested yet and I worry most about this.”

She also explained to delegates that at the height of the financial crisis, she was able to carry out more trades than in today’s market.

“Each buyer back then took around $50 million bonds from me, but I don’t have a single bank that would take that amount from me today, perhaps across five banks.” she said.

One delegate strongly agreed with Kenny’s experiences and said in 2008, “you could get anything done with your counterparties, but now it is an act of God!”

Panellists also agreed a shift to all-to-all trading and doubling efforts with data aggregation are the only plausible solution they see at the moment.

Wallin said he sees no solution, but instead a “reinvention” achieved through all-to-all trading and data aggregation.

Mark Russell, global head of credit execution services at UBS, added that the bond market isn’t quite there yet, but he strongly believes there is a solution out there.

“I think about things like blockchain and how that will open up things we haven’t even thought about yet. There will be more all-to-all trading in the market, but I’m not certain when this happen,” he said. 

The post Bond participants say stress event could have dire consequences appeared first on The TRADE.