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Alliancebernstein Holding L.P. (AB) SEC Filing 10-K Annual report for the fiscal year ending Wednesday, December 31, 2014

Alliancebernstein Holding L.P.

CIK: 825313 Ticker: AB
Document and Entity Information (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Jun. 30, 2014
Document and Entity Information [Abstract]    
Entity Registrant Name ALLIANCEBERNSTEIN HOLDING L.P.  
Entity Central Index Key 0000825313  
Current Fiscal Year End Date --12-31  
Entity Well-known Seasoned Issuer Yes  
Entity Voluntary Filers No  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Public Float   $ 2.3dei_EntityPublicFloat
Entity Common Stock, Shares Outstanding 100,756,999dei_EntityCommonStockSharesOutstanding [1]  
Document Fiscal Year Focus 2014  
Document Fiscal Period Focus FY  
Document Type 10-K  
Amendment Flag false  
Document Period End Date Dec. 31, 2014  
[1] includes 100,000 units of general partnership interest having economic interests equivalent to the economic interests of the units representing assignments of beneficial ownership of limited partnership interests.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2014

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to

Commission file number 001-09818
ALLIANCEBERNSTEIN HOLDING L.P.
(Exact name of registrant as specified in its charter)

Delaware
 
13-3434400
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
     
1345 Avenue of the Americas, New York, N.Y.
 
10105
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (212) 969-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of Class
 
Name of each exchange on which registered
units representing assignments of beneficial ownership of limited partnership interests
 
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes   No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):

Large accelerated filer 
Accelerated filer  
Non-accelerated filer 
Smaller reporting company  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes   No

The aggregate market value of the units representing assignments of beneficial ownership of limited partnership interests held by non-affiliates computed by reference to the price at which such units were last sold on the New York Stock Exchange as of June 30, 2014 was approximately $2.3 billion.

The number of units representing assignments of beneficial ownership of limited partnership interests outstanding as of December 31, 2014 was 100,756,999. (This figure includes 100,000 units of general partnership interest having economic interests equivalent to the economic interests of the units representing assignments of beneficial ownership of limited partnership interests.)

DOCUMENTS INCORPORATED BY REFERENCE

This Form 10-K does not incorporate any document by reference.
 


Table of Contents

Glossary of Certain Defined Terms
ii
     
Part I
   
Item 1.
1
Item 1A.
15
Item 1B.
22
Item 2.
22
Item 3.
22
Item 4.
23
     
Part II
   
Item 5.
24
Item 6.
26
 
26
 
27
Item 7.
28
 
28
 
29
 
31
Item 7A.
50
 
50
 
50
Item 8.
52
 
53
 
66
Item 9.
105
Item 9A.
105
Item 9B.
106
     
Part III
   
Item 10.
107
Item 11.
116
Item 12.
132
Item 13.
137
Item 14.
139
     
Part IV
   
Item 15.
140
142

Glossary of Certain Defined Terms

AB” – AllianceBernstein L.P. (Delaware limited partnership formerly known as Alliance Capital Management L.P., “Alliance Capital”), the operating partnership, and its subsidiaries and, where appropriate, its predecessors, AB Holding and ACMC, Inc. and their respective subsidiaries.

AB Holding” – AllianceBernstein Holding L.P. (Delaware limited partnership).

AB Holding Partnership Agreement” – the Amended and Restated Agreement of Limited Partnership of AB Holding, dated as of October 29, 1999 and as amended February 24, 2006.

AB Holding Units” – units representing assignments of beneficial ownership of limited partnership interests in AB Holding.

AB Partnership Agreement” – the Amended and Restated Agreement of Limited Partnership of AB, dated as of October 29, 1999 and as amended February 24, 2006.

AB Units” – units of limited partnership interest in AB.

AXA” – AXA (société anonyme organized under the laws of France), the holding company for an international group of insurance and related financial services companies engaged in the financial protection and wealth management businesses. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific regions and, to a lesser extent, in other regions including the Middle East, Africa and Latin America. AXA has five operating business segments: life and savings, property and casualty, international insurance, asset management and banking.

AXA Equitable” – AXA Equitable Life Insurance Company (New York stock life insurance company), a subsidiary of AXA Financial, and its subsidiaries other than AB and its subsidiaries.

AXA Financial” – AXA Financial, Inc. (Delaware corporation), a subsidiary of AXA.

Bernstein Transaction” – on October 2, 2000, AB’s acquisition of the business and assets of SCB Inc., formerly known as Sanford C. Bernstein Inc., and assumption of the liabilities of that business.

Exchange Act” – the Securities Exchange Act of 1934, as amended.

ERISA” – the Employee Retirement Income Security Act of 1974, as amended.

General Partner” – AllianceBernstein Corporation (Delaware corporation), the general partner of AB and AB Holding and a subsidiary of AXA Equitable, and, where appropriate, ACMC, LLC, its predecessor.

Investment Advisers Act” – the Investment Advisers Act of 1940, as amended.

Investment Company Act” – the Investment Company Act of 1940, as amended.

NYSE” – the New York Stock Exchange, Inc.

Partnerships” – AB and AB Holding together.

SEC” – the United States Securities and Exchange Commission.

Securities Act” – the Securities Act of 1933, as amended.

WPS Acquisition” – on December 12, 2013, AB acquired W.P. Stewart & Co., Ltd. (“WPS”), a concentrated growth equity investment manager.
 

PART I

Item 1. Business

The words “we” and “our” in this Form 10-K refer collectively to AB Holding and AB and its subsidiaries, or to their officers and employees. Similarly, the words “company” and “firm” refer to both AB Holding and AB. Where the context requires distinguishing between AB Holding and AB, we identify which company is being discussed. Cross-references are in italics.

We use “global” in this Form 10-K to refer to all nations, including the United States; we use “international” or “non-U.S.” to refer to nations other than the United States.

We use “emerging markets” in this Form 10-K to refer to countries included in the Morgan Stanley Capital International (“MSCI”) emerging markets index, which are, as of December 31, 2014, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Peru, the Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand and Turkey.

Clients

We provide research, diversified investment management and related services globally to a broad range of clients through three buy-side distribution channels, Institutions, Retail and Private Wealth Management, and our sell-side business, Bernstein Research Services.  See “Distribution Channels” in this Item 1 for additional information.

As of December 31, 2014, 2013 and 2012, our client assets under management (“AUM”) were $474 billion, $450 billion and $430 billion, respectively, and our net revenues for the years ended December 31, 2014, 2013 and 2012 were $3.0 billion, $2.9 billion and $2.7 billion, respectively. AXA, our parent company, and its subsidiaries, whose AUM consist primarily of fixed income investments, together constitute our largest client. Our affiliates represented approximately 23%, 23% and 25% of our AUM as of December 31, 2014, 2013 and 2012, respectively, and we earned approximately 5%, 5% and 4% of our net revenues from services we provided to our affiliates in 2014, 2013 and 2012, respectively. See “Distribution Channels” below and “Assets Under Management” and “Net Revenues” in Item 7 for additional information regarding our AUM and net revenues.

Generally, we are compensated for our investment services on the basis of investment advisory and services fees calculated as a percentage of AUM. For additional information about our investment advisory and services fees, including performance-based fees, seeRisk Factorsin Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.

Research

Our high-quality, in-depth research is the foundation of our business. We believe that our global team of research professionals, whose disciplines include economic, fundamental equity, fixed income and quantitative research, gives us a competitive advantage in achieving investment success for our clients. We also have experts focused on multi-asset strategies, wealth management and alternative investments.

Investment Services

Our broad range of investment services includes:

Ÿ Actively managed equity strategies with global and regional portfolios across capitalization ranges and investment strategies, including  value, growth and core equities;
Ÿ Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;
Ÿ Passive management, including index and enhanced index strategies;
Ÿ Alternative investments, including hedge funds, fund of funds and private equity (e.g., direct real estate investing); and
Ÿ Multi-asset services and solutions, including dynamic asset allocation, customized target-date funds and target-risk funds.

Our services span various investment disciplines, including market capitalization (e.g., large-, mid- and small-cap equities), term (e.g., long-, intermediate- and short-duration debt securities), and geographic location (e.g., U.S., international, global, emerging markets, regional and local), in major markets around the world.
 
Our AUM by client domicile and investment service as of December 31, 2014, 2013 and 2012 were as follows:

By Client Domicile ($ in billions):
 

 
By Investment Service ($ in billions):
 

Distribution Channels

Institutions

To these clients, which include private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and various of our affiliates, we offer separately-managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles (“Institutional Services”).

We manage the assets of our institutional clients pursuant to written investment management agreements or other arrangements,  which generally are terminable at any time or upon relatively short notice by either party. In general, our written investment management agreements may not be assigned without client consent. For information about our institutional investment advisory and services fees, including performance-based fees, seeRisk Factorsin Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.

AXA and its subsidiaries together constitute our largest institutional client. Their AUM accounted for approximately 32%, 31% and 35% of our institutional AUM as of December 31, 2014, 2013 and 2012, respectively, and approximately 22%, 22% and 17% of our institutional revenues for 2014, 2013 and 2012, respectively. No single institutional client other than AXA and its subsidiaries accounted for more than approximately 1% of our net revenues for the year ended December 31, 2014.
 
As of December 31, 2014, 2013 and 2012, Institutional Services represented approximately 50%, 50% and 51%, respectively, of our AUM, and the fees we earned from providing these services represented approximately 14%, 15% and 18% of our net revenues for 2014, 2013 and 2012, respectively. Our AUM and revenues are as follows:

Institutional Services Assets Under Management
(by Investment Service)

   
December 31,
   
% Change
 
   
2014
   
2013
   
2012
     
2014-13
     
2013-12
 
   
(in millions)
                 
                             
Equity Actively Managed:
                           
U.S.
 
$
9,631
   
$
8,438
   
$
5,748
     
14.1
%
   
46.8
%
Global & Non-US
   
19,522
     
21,100
     
25,797
     
(7.5
)
   
(18.2
)
Total
   
29,153
     
29,538
     
31,545
     
(1.3
)
   
(6.4
)
                                         
Equity Passively Managed(1):
                                       
U.S.
   
16,196
     
14,111
     
11,494
     
14.8
     
22.8
 
Global & Non-US
   
5,818
     
6,555
     
6,131
     
(11.2
)
   
6.9
 
Total
   
22,014
     
20,666
     
17,625
     
6.5
     
17.3
 
                                         
Total Equity
   
51,167
     
50,204
     
49,170
     
1.9
     
2.1
 
                                         
Fixed Income Taxable:
                                       
U.S.
   
84,079
     
81,823
     
90,727
     
2.8
     
(9.8
)
Global & Non-US
   
64,086
     
58,647
     
53,841
     
9.3
     
8.9
 
Total
   
148,165
     
140,470
     
144,568
     
5.5
     
(2.8
)
                                         
Fixed Income Tax-Exempt:
                                       
U.S.
   
1,796
     
1,611
     
1,385
     
11.5
     
16.3
 
Global & Non-US
   
     
     
     
     
 
Total
   
1,796
     
1,611
     
1,385
     
11.5
     
16.3
 
                                         
Fixed Income Passively Managed(1):
                                       
U.S.
   
67
     
63
     
62
     
6.3
     
1.6
 
Global & Non-US
   
185
     
194
     
334
     
(4.6
)
   
(41.9
)
Total
   
252
     
257
     
396
     
(1.9
)
   
(35.1
)
                                         
Total Fixed Income
   
150,213
     
142,338
     
146,349
     
5.5
     
(2.7
)
                                         
Other(2):
                                       
U.S.
   
2,268
     
1,211
     
471
     
87.3
     
157.1
 
Global & Non-US
   
33,393
     
32,237
     
23,829
     
3.6
     
35.3
 
Total
   
35,661
     
33,448
     
24,300
     
6.6
     
37.6
 
                                         
Total:
                                       
U.S.
   
114,037
     
107,257
     
109,887
     
6.3
     
(2.4
)
Global & Non-US
   
123,004
     
118,733
     
109,932
     
3.6
     
8.0
 
Total
 
$
237,041
   
$
225,990
   
$
219,819
     
4.9
     
2.8
 
                                         
Affiliated
 
$
75,241
   
$
69,619
   
$
77,569
     
8.1
     
(10.2
)
Non-affiliated
   
161,800
     
156,371
     
142,250
     
3.5
     
9.9
 
Total
 
$
237,041
   
$
225,990
   
$
219,819
     
4.9
     
2.8
 
 

(1) Includes index and enhanced index services.
(2) Includes multi-asset solutions and services and certain alternative investments.
 

Revenues from Institutional Services
(by Investment Service)

   
Years Ended December 31,
   
% Change
 
   
2014
   
2013
   
2012
     
2014-13
     
2013-12
 
   
(in thousands)
                 
Equity Actively Managed:
                           
U.S.
 
$
54,176
   
$
48,328
   
$
43,400
     
12.1
%
   
11.4
%
Global & Non-US
   
88,777
     
98,552
     
143,108
     
(9.9
)
   
(31.1
)
Total
   
142,953
     
146,880
     
186,508
     
(2.7
)
   
(21.2
)
                                         
Equity Passively Managed(1):
                                       
U.S.
   
2,841
     
2,720
     
2,334
     
4.4
     
16.5
 
Global & Non-US
   
4,333
     
5,359
     
5,533
     
(19.1
)
   
(3.1
)
Total
   
7,174
     
8,079
     
7,867
     
(11.2
)
   
2.7
 
                                         
Total Equity
   
150,127
     
154,959
     
194,375
     
(3.1
)
   
(20.3
)
                                         
Fixed Income Taxable:
                                       
U.S.
   
92,250
     
96,125
     
94,679
     
(4.0
)
   
1.5
 
Global & Non-US
   
125,596
     
117,041
     
104,803
     
7.3
     
11.7
 
Total
   
217,846
     
213,166
     
199,482
     
2.2
     
6.9
 
                                         
Fixed Income Tax-Exempt:
                                       
U.S.
   
2,250
     
1,993
     
1,742
     
12.9
     
14.4
 
Global & Non-US
   
     
     
     
     
 
Total
   
2,250
     
1,993
     
1,742
     
12.9
     
14.4
 
                                         
Fixed Income Passively Managed(1):
                                       
U.S.
   
69
     
76
     
78
     
(9.2
)
   
(2.6
)
Global & Non-US
   
142
     
227
     
48
     
(37.4
)
   
372.9
 
Total
   
211
     
303
     
126
     
(30.4
)
   
140.5
 
                                         
Fixed Income Servicing(2):
                                       
U.S.
   
11,468
     
14,051
     
9,172
     
(18.4
)
   
53.2
 
Global & Non-US
   
2,011
     
1,789
     
4,696
     
12.4
     
(61.9
)
Total
   
13,479
     
15,840
     
13,868
     
(14.9
)
   
14.2
 
                                         
Total Fixed Income
   
233,786
     
231,302
     
215,218
     
1.1
     
7.5
 
                                         
Other(3):
                                       
U.S.
   
18,643
     
11,952
     
46,400
     
56.0
     
(74.2
)
Global & Non-US
   
30,551
     
39,895
     
28,722
     
(23.4
)
   
38.9
 
Total
   
49,194
     
51,847
     
75,122
     
(5.1
)
   
(31.0
)
                                         
Total Investment Advisory and Services Fees:
                                       
U.S.
   
181,697
     
175,245
     
197,805
     
3.7
     
(11.4
)
Global & Non-US
   
251,410
     
262,863
     
286,910
     
(4.4
)
   
(8.4
)
     
433,107
     
438,108
     
484,715
     
(1.1
)
   
(9.6
)
Distribution Revenues
   
340
     
305
     
574
     
11.5
     
(46.9
)
Shareholder Servicing Fees
   
634
     
533
     
362
     
18.9
     
47.2
 
Total
 
$
434,081
   
$
438,946
   
$
485,651
     
(1.1
)
   
(9.6
)
                                         
Affiliated
 
$
95,231
   
$
96,729
   
$
82,930
     
(1.5
)
   
16.6
 
Non-affiliated
   
338,850
     
342,217
     
402,721
     
(1.0
)
   
(15.0
)
Total
 
$
434,081
   
$
438,946
   
$
485,651
     
(1.1
)
   
(9.6
)
 

(1) Includes index and enhanced index services.
(2) Fixed Income Servicing includes advisory-related services fees that are not based on AUM, including derivative transaction fees, capital purchase program related advisory services and other fixed income advisory services.
(3) Includes multi-asset solutions and services and certain alternative services.
 
Retail

We provide investment management and related services to a wide variety of individual retail investors, both in the U.S. and internationally, through retail mutual funds we sponsor, mutual fund sub-advisory relationships, separately-managed account programs (see below), and other investment vehicles (“Retail Products and Services”).

We distribute our Retail Products and Services through financial intermediaries, including broker-dealers, insurance sales representatives, banks, registered investment advisers and financial planners. These products and services include open-end and closed-end funds that are either (i) registered as investment companies under the Investment Company Act (“U.S. Funds”), or (ii) not registered under the Investment Company Act and generally not offered to United States persons (“Non-U.S. Funds” and, collectively with the U.S. Funds, “AB Funds”). They also include separately-managed account programs, which are sponsored by financial intermediaries and generally charge an all-inclusive fee covering investment management, trade execution, asset allocation, and custodial and administrative services. In addition, we provide distribution, shareholder servicing, transfer agency services and administrative services for our Retail Products and Services. See “Net Revenues – Investment Advisory and Services Fees” in Item 7 for information about our retail investment advisory and services fees. See Note 2 to AB’s consolidated financial statements in Item 8 for a discussion of the commissions we pay to financial intermediaries in connection with the sale of open-end AB Funds.

Fees paid by the U.S. Funds are reflected in the applicable investment management agreement, which generally must be approved annually by the boards of directors or trustees of those funds, including by a majority of the independent directors or trustees. Increases in these fees must be approved by fund shareholders; decreases need not be, including any decreases implemented by a fund’s directors or trustees. In general, each investment management agreement with the U.S. Funds provides for termination by either party at any time upon 60 days’ notice.

Fees paid by Non-U.S. Funds are reflected in investment management agreements that continue until they are terminated. Increases in these fees generally must be approved by the relevant regulatory authority, depending on the domicile and structure of the fund, and Non-U.S. Fund shareholders must be given advance notice of any fee increases.

The mutual funds we sub-advise for AXA and its subsidiaries together constitute our largest retail client. They accounted for approximately 21%, 23% and 20% of our retail AUM as of December 31, 2014, 2013 and 2012, respectively, and approximately 3%, 2% and 3% of our retail net revenues for 2014, 2013 and 2012, respectively.

Certain subsidiaries of AXA, including AXA Advisors, LLC (“AXA Advisors”), a subsidiary of AXA Financial, were responsible for approximately 3%, 2% and 4% of total sales of shares of open-end AB Funds in 2014, 2013 and 2012, respectively. During 2014, UBS AG was responsible for approximately 11% of our open-end AB Fund sales. Neither our affiliates nor UBS AG are under any obligation to sell a specific amount of AB Fund shares and each also sells shares of mutual funds that it sponsors and that are sponsored by unaffiliated organizations. No other entity accounted for 10% or more of our open-end AB Fund sales.

Most open-end U.S. Funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay, out of assets of the fund, distribution and service fees for the distribution and sale of its shares (“Rule 12b-1 Fees”). The open-end U.S. Funds have entered into such agreements with us, and we have entered into selling and distribution agreements pursuant to which we pay sales commissions to the financial intermediaries that distribute our open-end U.S. Funds. These agreements are terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares.

As of December 31, 2014, retail U.S. Fund AUM were approximately $49 billion, or 30% of retail AUM, as compared to $47 billion, or 31%, as of December 31, 2013, and $45 billion, or 31%, as of December 31, 2012. Non-U.S. Fund AUM, as of December 31, 2014, totaled $57 billion, or 36% of retail AUM, as compared to $56 billion, or 36%, as of December 31, 2013, and $60 billion, or 42%, as of December 31, 2012.
 
Our Retail Services represented approximately 34% of our AUM as of each of December 31, 2014, 2013 and 2012, and the fees we earned from providing these services represented approximately 46%, 47% and 44% of our net revenues for the years ended December 31, 2014, 2013 and 2012, respectively. Our AUM and revenues are as follows:

Retail Services Assets Under Management
(by Investment Service)

   
December 31,
   
% Change
 
   
2014
   
2013
   
2012
     
2014-13
     
2013-12
 
   
(in millions)
                 
                             
Equity Actively Managed:
                           
U.S.
 
$
29,449
   
$
27,656
   
$
17,738
     
6.5
%
   
55.9
%
Global & Non-US
   
15,920
     
13,997
     
16,415
     
13.7
     
(14.7
)
Total
   
45,369
     
41,653
     
34,153
     
8.9
     
22.0
 
                                         
Equity Passively Managed(1):
                                       
U.S.
   
21,268
     
21,514
     
16,716
     
(1.1
)
   
28.7
 
Global & Non-US
   
6,600
     
6,615
     
5,491
     
(0.2
)
   
20.5
 
Total
   
27,868
     
28,129
     
22,207
     
(0.9
)
   
26.7
 
                                         
Total Equity
   
73,237
     
69,782
     
56,360
     
5.0
     
23.8
 
                                         
Fixed Income Taxable:
                                       
U.S.
   
5,934
     
4,597
     
2,738
     
29.1
     
67.9
 
Global & Non-US
   
55,059
     
56,304
     
65,990
     
(2.2
)
   
(14.7
)
Total
   
60,993
     
60,901
     
68,728
     
0.2
     
(11.4
)
                                         
Fixed Income Tax-Exempt:
                                       
U.S.
   
10,432
     
8,243
     
8,532
     
26.6
     
(3.4
)
Global & Non-US
   
14
     
14
     
     
     
 
Total
   
10,446
     
8,257
     
8,532
     
26.5
     
(3.2
)
                                         
Fixed Income Passively Managed(1):
                                       
U.S.
   
4,917
     
4,531
     
2,385
     
8.5
     
90.0
 
Global & Non-US
   
4,483
     
4,179
     
4,730
     
7.3
     
(11.6
)
Total
   
9,400
     
8,710
     
7,115
     
7.9
     
22.4
 
                                         
Total Fixed Income
   
80,839
     
77,868
     
84,375
     
3.8
     
(7.7
)
                                         
Other(2):
                                       
U.S.
   
5,349
     
3,208
     
1,981
     
66.7
     
61.9
 
Global & Non-US
   
2,072
     
2,132
     
1,676
     
(2.8
)
   
27.2
 
Total
   
7,421
     
5,340
     
3,657
     
39.0
     
46.0
 
                                         
Total:
                                       
U.S.
   
77,349
     
69,749
     
50,090
     
10.9
     
39.2
 
Global & Non-US
   
84,148
     
83,241
     
94,302
     
1.1
     
(11.7
)
Total
 
$
161,497
   
$
152,990
   
$
144,392
     
5.6
     
6.0
 
                                         
Affiliated
 
$
34,693
   
$
35,194
   
$
28,535
     
(1.4
)
   
23.3
 
Non-affiliated
   
126,804
     
117,796
     
115,857
     
7.6
     
1.7
 
Total
 
$
161,497
   
$
152,990
   
$
144,392
     
5.6
     
6.0
 
 

(1) Includes index and enhanced index services.
(2) Includes multi-asset solutions and services and certain alternative investments.
 
Revenues from Retail Services
(by Investment Service)

   
Years Ended December 31,
   
% Change
 
   
2014
   
2013
   
2012
     
2014-13
     
2013-12
 
   
(in thousands)
                 
                             
Equity Actively Managed:
                           
U.S.
 
$
182,008
   
$
134,311
   
$
92,423
     
35.5
%
   
45.3
%
Global & Non-US
   
94,491
     
96,338
     
114,220
     
(1.9
)
   
(15.7
)
Total
   
276,499
     
230,649
     
206,643
     
19.9
     
11.6
 
                                         
Equity Passively Managed(1):
                                       
U.S.
   
10,066
     
10,957
     
11,952
     
(8.1
)
   
(8.3
)
Global & Non-US
   
6,924
     
4,670
     
2,162
     
48.3
     
116.0
 
Total
   
16,990
     
15,627
     
14,114
     
8.7
     
10.7
 
                                         
Total Equity
   
293,489
     
246,276
     
220,757
     
19.2
     
11.6
 
                                         
Fixed Income Taxable:
                                       
U.S.
   
20,680
     
16,074
     
13,252
     
28.7
     
21.3
 
Global & Non-US
   
429,409
     
483,171
     
405,208
     
(11.1
)
   
19.2
 
Total
   
450,089
     
499,245
     
418,460
     
(9.8
)
   
19.3
 
                                         
Fixed Income Tax-Exempt:
                                       
U.S.
   
38,317
     
35,993
     
28,906
     
6.5
     
24.5
 
Global & Non-US
   
78
     
78
     
     
     
 
Total
   
38,395
     
36,071
     
28,906
     
6.4
     
24.8
 
                                         
Fixed Income Passively Managed(1):
                                       
U.S.
   
2,836
     
2,153
     
1,144
     
31.7
     
88.2
 
Global & Non-US
   
8,438
     
8,605
     
7,056
     
(1.9
)
   
22.0
 
Total
   
11,274
     
10,758
     
8,200
     
4.8
     
31.2
 
                                         
Total Fixed Income
   
499,758
     
546,074
     
455,566
     
(8.5
)
   
19.9
 
                                         
Other(2):
                                       
U.S.
   
64,452
     
22,819
     
14,306
     
182.4
     
59.5
 
Global & Non-US
   
9,277
     
9,785
     
7,424
     
(5.2
)
   
31.8
 
Total
   
73,729
     
32,604
     
21,730
     
126.1
     
50.0
 
                                         
Total Investment Advisory and Services Fees:
                                       
U.S.
   
318,359
     
222,307
     
161,983
     
43.2
     
37.2
 
Global & Non-US
   
548,617
     
602,647
     
536,070
     
(9.0
)
   
12.4
 
     
866,976
     
824,954
     
698,053
     
5.1
     
18.2
 
Distribution Revenues
   
440,961
     
461,944
     
406,467
     
(4.5
)
   
13.6
 
Shareholder Servicing Fees
   
89,198
     
89,472
     
88,375
     
(0.3
)
   
1.2
 
Total
 
$
1,397,135
   
$
1,376,370
   
$
1,192,895
     
1.5
     
15.4
 
                                         
Affiliated
 
$
47,910
   
$
43,264
   
$
31,089
     
10.7
     
39.2
 
Non-affiliated
   
1,349,225
     
1,333,106
     
1,161,806
     
1.2
     
14.7
 
Total
 
$
1,397,135
   
$
1,376,370
   
$
1,192,895
     
1.5
     
15.4
 
 

(1) Includes index and enhanced index services.
(2) Includes multi-asset solutions and services and certain alternative investments.


Private Wealth Management

To our private wealth clients, which include high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities (including most institutions for which we manage accounts with less than $25 million in AUM), we offer separately-managed accounts, hedge funds, mutual funds and other investment vehicles (“Private Wealth Services”).

We manage these accounts pursuant to written investment advisory agreements, which generally are terminable at any time or upon relatively short notice by any party and may not be assigned without the consent of the client. For information about our investment advisory and services fees, including performance-based fees, seeRisk Factorsin Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.

As of December 31, 2014, 2013 and 2012, Private Wealth Services represented approximately 16%, 16% and 15%, respectively, of our AUM, and the fees we earned from providing these services represented approximately 22%, 20% and 21% of our net revenues for 2014, 2013 and 2012, respectively. Our AUM and revenues are as follows:

Private Wealth Services Assets Under Management
(by Investment Service)

   
December 31,
   
% Change
 
   
2014
   
2013
   
2012
     
2014-13
     
2013-12
 
   
(in millions)
                 
                             
Equity Actively Managed:
                           
U.S.
 
$
22,842
   
$
21,620
   
$
16,506
     
5.7
%
   
31.0
%
Global & Non-US
   
15,125
     
15,003
     
13,222
     
0.8
     
13.5
 
Total
   
37,967
     
36,623
     
29,728
     
3.7
     
23.2
 
                                         
Equity Passively Managed(1):
                                       
U.S.
   
172
     
83
     
67
     
107.2
     
23.9
 
Global & Non-US
   
402
     
397
     
371
     
1.3
     
7.0
 
Total
   
574
     
480
     
438
     
19.6
     
9.6
 
                                         
Total Equity
   
38,541
     
37,103
     
30,166
     
3.9
     
23.0
 
                                         
Fixed Income Taxable:
                                       
U.S.
   
7,396
     
7,468
     
8,962
     
(1.0
)
   
(16.7
)
Global & Non-US
   
2,871
     
2,128
     
1,755
     
34.9
     
21.3
 
Total
   
10,267
     
9,596
     
10,717
     
7.0
     
(10.5
)
                                         
Fixed Income Tax-Exempt:
                                       
U.S.
   
19,401
     
18,843
     
20,835
     
3.0
     
(9.6
)
Global & Non-US
   
3
     
2
     
     
50.0
     
 
Total
   
19,404
     
18,845
     
20,835
     
3.0
     
(9.6
)
                                         
Fixed Income Passively Managed(1):
                                       
U.S.
   
5
     
11
     
31
     
(54.5
)
   
(64.5
)
Global & Non-US
   
402
     
357
     
355
     
12.6
     
0.6
 
Total
   
407
     
368
     
386
     
10.6
     
(4.7
)
                                         
Total Fixed Income
   
30,078
     
28,809
     
31,938
     
4.4
     
(9.8
)
                                         
Other(2):
                                       
U.S.
   
1,902
     
1,375
     
804
     
38.3
     
71.0
 
Global & Non-US
   
4,968
     
4,144
     
2,898
     
19.9
     
43.0
 
Total
   
6,870
     
5,519
     
3,702
     
24.5
     
49.1
 
                                         
Total:
                                       
U.S.
   
51,718
     
49,400
     
47,205
     
4.7
     
4.6
 
Global & Non-US
   
23,771
     
22,031
     
18,601
     
7.9
     
18.4
 
Total
 
$
75,489
   
$
71,431
   
$
65,806
     
5.7
     
8.5
 
 

(1) Includes index and enhanced index services.
(2) Includes multi-asset solutions and services and certain alternative investments.
 
Revenues From Private Wealth Services
(by Investment Service)

   
Years Ended December 31,
   
% Change
 
   
2014
   
2013
   
2012
     
2014-13
     
2013-12
 
   
(in thousands)
                 
                             
Equity Actively Managed:
                           
U.S.
 
$
250,415
   
$
211,927
   
$
209,263
     
18.2
%    
1.3
%
Global & Non-US
   
169,472
     
153,062
     
149,732
     
10.7
     
2.2
 
Total
   
419,887
     
364,989
     
358,995
     
15.0
     
1.7
 
                                         
Equity Passively Managed(1):
                                       
U.S.
   
695
     
316
     
65
     
119.9
     
386.2
 
Global & Non-US
   
1,839
     
1,800
     
1,666
     
2.2
     
8.0
 
Total
   
2,534
     
2,116
     
1,731
     
19.8
     
22.2
 
                                         
Total Equity
   
422,421
     
367,105
     
360,726
     
15.1
     
1.8
 
                                         
Fixed Income Taxable:
                                       
U.S.
   
39,811
     
44,260
     
48,906
     
(10.1
)
   
(9.5
)
Global & Non-US
   
15,778
     
13,029
     
12,319
     
21.1
     
5.8
 
Total
   
55,589
     
57,289
     
61,225
     
(3.0
)
   
(6.4
)
                                         
Fixed Income Tax-Exempt:
                                       
U.S.
   
102,509
     
104,867
     
117,035
     
(2.2
)
   
(10.4
)
Global & Non-US
   
27
     
18
     
     
50.0
     
 
Total
   
102,536
     
104,885
     
117,035
     
(2.2
)
   
(10.4
)
                                         
Fixed Income Passively Managed(1):
                                       
U.S.
   
9
     
88
     
26
     
(89.8
)
   
238.5
 
Global & Non-US
   
3,446
     
3,105
     
1,184
     
11.0
     
162.2
 
Total
   
3,455
     
3,193
     
1,210
     
8.2
     
163.9
 
                                         
Total Fixed Income
   
161,580
     
165,367
     
179,470
     
(2.3
)
   
(7.9
)
                                         
Other(2):
                                       
U.S.
   
16,566
     
12,699
     
9,592
     
30.5
     
32.4
 
Global & Non-US
   
57,600
     
40,872
     
31,919
     
40.9
     
28.0
 
Total
   
74,166
     
53,571
     
41,511
     
38.4
     
29.1
 
                                         
Total Investment Advisory and Services Fees:
                                       
U.S.
   
410,005
     
374,157
     
384,887
     
9.6
     
(2.8
)
Global & Non-US
   
248,162
     
211,886
     
196,820
     
17.1
     
7.7
 
Total
   
658,167
     
586,043
     
581,707
     
12.3
     
0.7
 
Distribution Revenues
   
3,669
     
3,175
     
2,447
     
15.6
     
29.8
 
Shareholder Servicing Fees
   
2,488
     
2,140
     
1,637
     
16.3
     
30.7
 
Total
 
$
664,324
   
$
591,358
   
$
585,791
     
12.3
     
1.0
 
 

(1) Includes index and enhanced index services.
(2) Includes multi-asset solutions and services and certain alternative investments.
 
Bernstein Research Services

We offer high-quality fundamental research, quantitative services and brokerage-related services in equities and listed options to institutional investors, such as pension fund, hedge fund and mutual fund managers, and other institutional investors (“Bernstein Research Services”). We serve our clients, which are based in the United States, Europe, Asia, the Middle East and Canada, through various subsidiaries, including Sanford C. Bernstein & Co., LLC (“SCB LLC”), Sanford C. Bernstein Limited and Sanford C. Bernstein (Hong Kong) Limited (collectively, “SCB”). Our sell-side analysts, who provide fundamental company and industry research along with quantitative research into securities valuation and factors affecting stock-price movements, are consistently among the highest ranked research analysts in industry surveys conducted by third-party organizations.

We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These clients compensate us principally by directing SCB to execute brokerage transactions on their behalf, for which we earn commissions. These services accounted for approximately 16%, 15% and 15% of our net revenues for the years ended December 31, 2014, 2013 and 2012, respectively.

For information regarding trends in fee rates charged for brokerage transactions, see “Risk Factors” in Item 1A.

Our Bernstein Research Services revenues are as follows:

Revenues From Bernstein Research Services

 
Years Ended December 31,
   
% Change
 
 
2014
 
2013
 
2012
    2014-13     2013-12  
 
(in thousands)
                 
                       
Bernstein Research Services
 
$
482,538
   
$
445,083
   
$
413,707
     
8.4
%
   
7.6
%

Custody

SCB LLC acts as custodian for the majority of our Private Wealth Management AUM and some of our Institutions AUM. Other custodial arrangements are maintained by client-designated banks, trust companies, brokerage firms or custodians.

Employees

As of December 31, 2014, our firm had 3,487 full-time employees, representing a 5.8% increase compared to the end of 2013.  We consider our employee relations to be good.

Service Marks

We have registered a number of servi