NASHVILLE - AllianceBernstein L.P. (NYSE: NYSE:AB), a global investment management firm, has announced a partnership with Reinsurance Group (NYSE:RGA) of America, Incorporated (NYSE: RGA), to expand its insurance business. AB will be one of the key investors in Ruby Reinsurance Company, a new reinsurance sidecar vehicle by RGA targeting the U.S. asset-intensive market.
The partnership includes AB's commitment to manage private alternative assets for RGA's general account and the appointment of an AB representative to the Ruby Re Board of Directors. This move is part of AB's strategy to strengthen its position in insurance asset management.
Onur Erzan, AB's Head of Global Client Group and Bernstein Private Wealth, highlighted the significance of the investment in Ruby Re, stating it underscores AB's effort to grow its insurance investment management business. Leslie Barbi, RGA's Executive Vice President and Chief Investment Officer, welcomed AB's investment as a key element in RGA's growth strategy, enhancing their asset-intensive capabilities.
The collaboration with RGA comes after AB's earlier announcement this year of appointing Geoff Cornell as the firm's first Chief Investment Officer of Insurance. Neil Jain, AB's Head of Strategy, expressed enthusiasm for the partnership's potential to accelerate AB's insurance sector momentum and expand their business and platform in the field.
As of October 31, 2024, AllianceBernstein reported managing $793 billion in assets. The firm provides investment services to a diverse client base, including institutional investors, individuals, and private wealth clients across major world markets.
This strategic initiative is based on a press release statement and represents AB's latest step in its broader plan to enhance its insurance asset management offerings.
In other recent news, AllianceBernstein Holding L.P. has demonstrated robust performance in recent earnings and revenue results. The investment firm surpassed $800 billion in assets under management (AUM), a significant milestone achieved through consistent net inflows over three consecutive quarters and substantial growth in its private markets platform. Adjusted earnings per unit also saw an increase.
TD Cowen, after reviewing AllianceBernstein's third-quarter performance, retained its Buy rating on the company and set a price target of $41. The firm noted AllianceBernstein's resilient fee rate and potential for further operating leverage as positive indicators. TD Cowen also anticipates a constructive outcome from AllianceBernstein's upcoming site visit, which is expected to provide additional insights into the company's operations and future prospects.
AllianceBernstein's private markets platform expanded to $68 billion AUM, with a future target of $100 billion. Despite some redemptions in active equity strategies, the firm achieved its highest quarterly retail inflows since 2021. The company remains optimistic about its future, as indicated by its plans to scale existing funds, launch new products, and expand teams, especially in private credit. These recent developments suggest that AllianceBernstein continues to focus on its growth strategy.
InvestingPro Insights
AllianceBernstein's strategic partnership with Reinsurance Group of America aligns well with the company's strong financial position and growth prospects. According to InvestingPro data, AB boasts a market capitalization of $4.1 billion and an attractive P/E ratio of 10.47, suggesting the stock may be undervalued relative to its earnings potential.
InvestingPro Tips reveal that AB has maintained dividend payments for an impressive 37 consecutive years, demonstrating a commitment to shareholder returns. This is further supported by the company's substantial dividend yield of 8.51%, making it an attractive option for income-focused investors. The high return over the last year, with a 1-year price total return of 51.35%, indicates strong market performance and investor confidence in AB's strategic direction.
The company's profitability is also noteworthy, with InvestingPro data showing a 100% gross profit margin and operating income margin for the last twelve months as of Q3 2024. This financial strength provides AB with the resources to pursue growth initiatives like the RGA partnership.
For investors seeking more comprehensive insights, InvestingPro offers 7 additional tips for AllianceBernstein, providing a deeper understanding of the company's financial health and future prospects.
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