The last eight or so months have not been particularly easy for AllianceBernstein (AB), and the shares have been more of a middle-of-the-road performer compared to other asset managers like Artisan Partners (APAM), BlackRock (BLK), Janus Henderson (JHG), Invesco (IVZ), and T.Rowe Price (TROW), though the strong distributions have pushed up the total returns to above-peer levels.
While relatively weak fixed income fund performance is a concern, given the sheer size of the business, the ongoing growth and outperformance in active equity is an important offset. The move to Nashville will help on costs, but I would like to see the company to move to build up its offering in alternative investments (like requiring some modest M&A). All told, I believe AllianceBernstein is meaningfully undervalued today and offers an attractive distribution, but the recent distribution cut doesn't help sentiment, and volatility in the credit markets is going to continue to create some near-term challenges.
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