AllianceBernstein (NYSE:AB) reported record assets under management and its strongest quarterly sales in five years during the second quarter of 2026, as fixed-income demand, private-market deployments and insurance-related mandates helped the firm return to positive organic growth.
Adjusted earnings were $0.82 per unit, up 8% from a year earlier. Adjusted net revenue rose 5% to $888 million, while operating income increased 7% to $293 million. The firm’s adjusted operating margin expanded 70 basis points year over year to 33%.
Record AUM and positive net flows
Assets under management ended the quarter above $905 billion, a record for the firm. AllianceBernstein generated nearly $800 million of firmwide net inflows, ending four consecutive quarters of outflows.
Fixed income was the largest contributor to flows. During the quarter, the firm funded a $9 billion passive fixed-income mandate from Equitable. Demand for tax-efficient income and gains in the municipal business added roughly $3 billion of inflows, Bernstein said.
Alternatives and multi-asset strategies generated more than $4 billion of net inflows, marking a sixth consecutive quarter of positive organic growth in that category. However, active-equity outflows were nearly $11 billion and taxable fixed-income outflows exceeded $4 billion, largely reflecting retail redemptions in Asia-Pacific.
Bernstein said allocations in the region have shifted toward local equity markets following their strong performance. President Onur Erzan said institutional demand for fixed income in Asia remained robust, including for both fundamental investment-grade and systematic strategies.
Retail gross sales reached $31 billion, the highest quarterly level in five years, producing $900 million of net inflows. Excluding the Equitable mandate, retail gross sales were $22 billion, up 14% from the comparable 2025 period.
Private-markets target reached ahead of schedule
AllianceBernstein ended the quarter with $91 billion in private-market AUM, surpassing the low end of its $90 billion-to-$100 billion Investor Day target more than a year before its 2027 goal.
The firm subsequently onboarded approximately $11.8 billion of commercial mortgage loans from Equitable in July, ahead of schedule. Including those assets, private-market AUM exceeded the upper end of the original target range, executives said.
The commercial mortgage assets are expected to begin generating management fees in the fourth quarter at a high-single-digit fee rate. Chief Financial Officer Tom Simeone said the blended rate is expected to rise over time as the firm originates new loans and adds servicing revenue.
AllianceBernstein’s third-party insurance business managed $61 billion across roughly 100 clients at quarter-end, including $34 billion in general-account assets, up more than 30% from a year earlier. During the first half, the firm began seven new insurance relationships and deployed nearly $3 billion of third-party insurance capital on a gross basis.
Executives also discussed the proposed combination of Equitable and Corebridge. AllianceBernstein expects to add at least $100 billion of Corebridge assets over time following the close of the transaction, which is expected around year-end. Simeone said roughly 20% to 30% of those assets could come online in 2027, with the pace accelerating in 2028.
Erzan said the combined entity is expected to have about $350 billion in general-account assets and roughly $200 billion in separate-account assets. While initial asset transitions may include lower-fee core fixed-income mandates, executives said the assets should carry attractive incremental margins because they can be supported through existing infrastructure.
Growth platforms expand
Bernstein Private Wealth ended the quarter with $167 billion in assets and accounted for nearly 40% of firmwide revenue. The business recorded $700 million of net outflows during the quarter, which Bernstein attributed to seasonal tax-related selling, but net new assets grew at a 6% annualized rate over the prior 12 months.
Erzan said alternatives represent nearly 10% of private-wealth client allocations and could rise to the mid-teens over time, subject to client needs. Private wealth raised approximately $900 million for alternatives during the second quarter.
The firm’s separately managed account platform reached $69 billion in AUM and posted 17% annualized organic growth over the prior year. Its customized retirement platform grew to $117 billion in assets.
AllianceBernstein also continued expanding active exchange-traded funds globally. The platform included 31 strategies and more than $20 billion in AUM, with assets growing 73% organically over the past year. The active ETF business generated approximately $100 million in annualized management-fee revenue, according to Bernstein.
Expenses and outlook
Base fees increased 7% year over year, reflecting higher average AUM, though shifts in product and channel mix affected the firmwide fee rate. The second-quarter fee rate was 37.7 basis points and was also affected by the June 30 timing of the $9 billion Equitable mandate, which added period-end assets but generated little quarterly management-fee revenue.
Total operating expenses rose 4% to $595 million. Compensation and benefits increased 5%, while the compensation ratio remained 48.5% of adjusted net revenue. The company lowered its full-year non-compensation expense outlook to $620 million to $640 million from a prior range of $625 million to $650 million.
AllianceBernstein raised its outlook for 2026 performance fees to $115 million to $135 million, from $95 million to $115 million previously. The increase reflects stronger expected public-market performance fees, while the outlook for private-market performance fees was reduced to $55 million to $65 million from $70 million to $80 million.
Simeone said the private-market revision reflected unrealized portfolio marks and tax events at the investor level, rather than credit events. The firm also lowered its expected full-year tax rate to 5% to 6%, from 6% to 7%.
About AllianceBernstein (NYSE:AB)
AllianceBernstein is a global investment management firm that offers a broad range of research-driven strategies across equities, fixed income, multi-asset solutions and alternative investments. The firm provides active and quantitative portfolio management, drawing on in-house research capabilities to serve the needs of institutional clients, private wealth investors and intermediaries. Its product lineup encompasses mutual funds, separately managed accounts and customized investment vehicles designed to meet diverse risk-return objectives.
The firm’s roots date back to 1967 with the founding of Sanford C.
