We talk about the hotel now. We'll save it for later. Actually, let me—we have yet to have one session with Seth, and he did not say anything, you know, negative about this place. But, you know, we'll see what we can get through the session. But let me get the intro out of the way first. So it is my pleasure to welcome Seth Bernstein, President and CEO of AllianceBernstein. With about $800 billion in assets under management, AllianceBernstein has been one of the stronger organic growth stories in the space, supported by expansion into private credit, robust fixed-income momentum, and really differentiated growth in active equities as well. In addition, the firm's partnership with Equitable continues to present compelling opportunities both in the wealth management space as well as the insurance space.
So, with lots of momentum in the business, Seth, great to have you back here despite the fact that you don't love the hotel, as you already mentioned.
No one likes this hotel, but everyone likes the Goldman Conference.
There you go.
One of your clients was taking a shower here last night, this morning, and the whole shower head blew off in this space.
It's TMI, and thank you for sharing that with us.
believe I could.
Now we have to find out who the client was. But please don't say that publicly. Okay. Onto the agenda of the day. I was hoping we could start with asset allocation trends you see in the market today. Clearly, it's been a pretty robust environment macro-wise. Equity market's up a lot. Credit spreads are really tight. U.S., obviously, a lot better than non-U.S., and interest rates are starting to come down. I guess this move out of money market funds into fixed income has taken a bit longer, but it feels like it's starting to finally kinda accelerate and get run out.
Yeah, we've been saying that a while, so.
Right. So let's talk a little bit about that. What are you hearing on the ground? Is this acceleration sustainable? And how are you guys positioned to capture some of that money in motion?
First, thanks for having me.
Pleasure.
I really like the new background and,
There you go.
Look, the trends continue. It's a great market to be invested in. Enjoy it while it's here, but we think it actually will continue into next year and for a little while beyond that by virtue of the new administration's coming in. The economy is moving very nicely. We think the Fed will ease next week, and we continue to have confidence that money will continue to move off the sidelines. It has been slower, for sure, than at least I thought it would be. Part of it is the curve itself.
Mm-hmm.
But, you know, we're mildly positive. But also, more importantly, as the Fed continues to cut, it's gonna be increasingly difficult for you to keep that trade going in the front end. And so I think you need to see the curve steepen more. Look, I think the payroll numbers last week in the revision only reinforce the fact that the economy is slowing, albeit at a pretty nice rate. So the truth of the matter is it's a reasonably attractive market to be in fixed income. There is no value in spreads at present, although they're not as tight as one might think on a risk-adjusted basis.
Mm-hmm.
Just looking at the underlying quality and health of the average credit in the marketplace that we look at. So we think there is more to run there. We continue Asia got off the blocks much earlier for, I think.
Yeah.
Its own reasons than the U.S. did, although we're beginning to see that trend, but what we saw more pronounced after the election was equities. Equities moved hard, and so we're continuing to see that. The search activity, interestingly, even in institutional. As for us anyway, seems to be much higher. That's not necessarily finding its way into our backlog yet, but we're in more equity searches than we've been in a long time.
Wow.
And an interesting area is not growth per se, but in value. In global, in the markets that have been underperforming, people are looking for new managers there. But we also see that appetite elsewhere. In fixed income, we are beginning to see, we continue to see strong flows in muni SMA, which has really been a story for us this year. And we're continuing to see interest in Asia, although it always slows down toward the end of the year. And so this is no exception.
Right.
In that regard, when we look at our overall flow story, continue to be very positive in retail. Still see headwinds in institutional. And so November, which will release, I guess, tomorrow, will be negative, but not by much. And it's really a function of the continuing story in the equity side. Now, I would say there we've seen real improvement in the investment performance on the underlying strategies that were the source of the issue in institutional. And so while I don't think we're at the end, we're a whole lot closer to it, I think.
Gotcha.
So I'm feeling a bit better on that front.
Yeah. Great. All right. We'll dig into all of this over the course of the next 30 minutes or so. But I wanted to start with fixed income. It's clearly been a very big contributor to organic growth at AllianceBernstein for not just this year, but over time. I think you guys are on track to do like north of $20 billion of net flows into fixed income year to date. You mentioned credit spreads, and I wanted to zone in on that a little bit. Super tight environment for credit. Interest rates are starting to come down, so that's good news. But as you sort of think about the manager selection process in a world where credit spreads are so tight, how are you positioned? Are you seeing clients spending more time on individual manager as opposed to just broadly allocating to the asset class?
How are you positioned to win within fixed income when it comes to that?
We are seeing more scrutiny on underwriting decisions on individual names, for sure. I think that's part and parcel of a recognition that, your gain from forward is simply on rates. It's not on spreads.
Yeah.
But they can stay tight for a long time. We've seen periods like that before. I suspect we'll see it again here. The interest in fixed income institutionally has been remarkably robust. We've seen strong demand everywhere, and so that's really been what's been driving it. And issuance is up. Issuance is up big.
Mm-hmm.
So it's a pretty robust market right now. I think from an active management perspective, particularly in investment grade, it's what you avoid rather than what you own. That is really the distinction between outperformers and underperformers. And so those people who have strong, pretty systematic risk processes probably benefit here. And most, most corporate managers are not great at sector selection. That's where you see the bigger losses, whether people buy energy 'cause energy seems cheap. And, and it's cheap for a reason.
Yeah.
We tend to be quite broadly diversified in what we own. So when Bernstein underperforms, it's because credit is really underperforming as a segment as opposed to individual idiosyncratic bets that we're making.
Mm-hmm.
’Cause we try to avoid industry bets, sector bets, and in particular, or even individual security names. So I think that diversification really matters because I think the information insight the average credit investor has, particularly in investment grade, isn’t that great. The story is different.
Yeah.
In high yield, where your payout pattern as a whole is less asymmetric.
Mm-hmm.
than it is in investment grade. And we continue to see opportunities there. But I think people are watching to see what people own because, as I said earlier, it's what you own, it's what you don't own that's gonna save you.
Yeah.
When the correction comes, which I don't think it's imminent, but it is there.
Yeah. I mean, we've definitely seen dispersion widen among fixed income managers.
For sure.
Over the last couple of years and that was, granted, more or less a rates move, but.
Correct.
You might.
I think this is where that security selection decision matters.
Right. Yeah.
Is now in the cycle.
Right.
Because I just don't see how the beta move continues to benefit.
Yeah. Makes sense. Makes sense. All right. Let's turn to equities for a couple of minutes. So, it's really been a tale of two cities, I feel like, for you guys. You've seen good flows on the retail side, actually positive flows in active equities and retail, which.
That's continued.
Not a lot of people could say that. I mean, we all know the story for active equities in the intermediary channel and retail channels were pretty challenged, offset by pretty significant redemption on the institutional side. So can you maybe just kinda walk us through what differentiates AllianceBernstein's success on the retail side, and at the same time, you alluded to that a little bit, but any signs of stabilization you're seeing on the institutional side?
Yeah. Sure. Let's go through it. Look, our contention is no one's gonna buy active in a marketplace unless you have a, a return stream they want that they can't replicate.
Mm-hmm.
So you're probably gonna have to have pretty high active share.
Mm-hmm.
Or an extraordinary information ratio.
Mm-hmm.
And/or both. And I think that's hard to do. We've very much focused on those kinds of services when we were out rebuilding our investment platform over the last 15 years in equities. That's exactly what we were trying to accomplish. And for the most part, we did. Several of those strategies have gone through periods of underperformance or Concentrated Growth strategy or Global Core strategy. Those were the two strategies that most underperformed. Those are the ones where we've seen significant pickup in relative performance over the last several months.
Mm-hmm.
They both got hit absolutely by a lack of holdings or market weight holdings in the mega caps.
Yep.
and they've made some other mistakes on their own. But the fact is that they have tightened up on their underwriting processes and their holding disciplines. And we've seen a pretty strong recovery. It's not - they haven't dug themselves all the way out. They were principally institutional in their holdings.
Mm-hmm.
Excuse me, in the clients who held them. And we have pretty good visibility where we see risk there by virtue of our conversations with the clients, what we hear from consultants. Excuse me. And so, that's why while it has been fairly heavy, we think we're toward the end of that cycle.
Mm-hmm.
But we still see signs of it. Large Cap Growth where we've seen both institutional and retail interest, that's really driven a lot of our retail as is our low-vol strategy, our sustainable strategy. They've continued to be strong, particularly in the case of Large Cap Growth in Japan. That has continued to flow positively for us. And that's a pretty important part of that strategy.
Yeah.
It's not the majority, but it's, it's an important part of it. We also are seeing more interest in the value strategies, which have quite strong performance, but.
Yeah, and that's new because that hadn't really ever been around there.
And that hadn't been around for us for a long time.
Yeah.
That's been, for us, our Select strategy, which is more markets driven, a business that we acquired about 12 years ago.
Mm-hmm.
Has been a very strong performer this year. So we've continued to have four or five really well-performing equity strategies that have appealed in the retail space.
Mm-hmm.
So I think it's a function both of the regions we've been selling in Asia for Large Cap Growth, as well as having distinctive strategies in the U.S. market that have helped to drive that. We've also seen, pretty quick pickup in our newest team that we recruited out of AGI last year, which is a global growth strategy based out of Germany.
Mm-hmm.
where we are seeing real appetite and pickup in Europe in particular. So it's continuing. I'd like to see the performance improve even more on the strategies that underperformed.
Right.
To get back to where they can begin to acquire again. That'll take several years, from my vantage point.
Gotcha.
To see those kick back in. But the engine continues to be performing pretty well.
Great. All right. Let's talk a little bit about some of the, you know, thematic kinda dynamics, in the growth dynamics in the space. Active ETFs, that's a big, it's been a big focus for you guys. You were sort of early to market, with a couple of products there. It's grown nicely. It's not huge. It's like $5 billion in the ETFs.
5.5 . 70% of it are new strategies. They are not,
Not a replica, but.
They're not replicas.
Yeah.
Not analogs. We think that's very important.
Yeah.
Because our own contention, particularly in the U.S., is you're only gonna launch mutual funds for specific bespoke purposes.
Mm-hmm.
Whether it's in a 401(k) plan or something else. The market, I think, has transitioned to ETFs where the underlying securities make sense, which equities, by and large, is the case. Now, we will continue to look at launching analogs if we believe the net present value of doing that is worth it. And up to now, we've had several examples, but the vast majority have been new strategies that we've been doing.
Yeah. Great.
And we, I think we have, I think, 17 strategies out there now. So we've continued to expand it. And we've gone offshore. We're in Australia. We're looking at doing it in Taiwan as well.
So importantly, it doesn't sound like it's cannibalizing any of the mutual fund complexes because these are all kinda newer.
70% are new.
I just, I'm sorry.
Just to be clear about it.
Yeah. Okay.
The ones we converted were pretty small strategies anyway, so I don't really think we are converting.
Yeah.
I'm sorry.
You're cannibalizing.
Go ahead.
Gotcha. Okay.
Sorry.
Let's spend a couple of minutes on private markets. It's been obviously a big area of focus for the firm. You guys had quite a bit of success there. I think you were at about $68 billion in AUM, and you previously talked about getting it to $100 billion by 2027, north of 20% of management fees. That's your goal for, you know, a couple of years out as well. Can you talk about the path of getting there? And with private credit in particular being a big, pretty big part of that build, what are some of the key origination capabilities that differentiate AB, relative to competitors and gives you kind of an edge in the marketplace?
To me, we embarked upon private credit as our focus principally because of our insurance franchise.
Mm-hmm.
Our contention was Equitable in particular, but the industry as a whole, and we surely weren't the first to identify this. I wish I were, but the industry needed to up the yield on those portfolios in order to be competitive. That was particularly an acute problem at low interest rates. Less acute today, but the need is still ever apparent, particularly as the industry seeks to put annuities into 401(k) and 403(b) plans under the SECURE Act. They're gonna need to continue, to up the yield and be competitive relative to being outright in the fixed income market.
Mm-hmm.
And I think the industry understands that. I think Apollo has been the catalyst for that to happen. And we come up in their wake, which is just fine 'cause I think we're still in the mid-innings of this transition rather than in the later stages of the game. Where we think we have a competitive edge is really threefold. One is in the insurance space where we already have a preferential relationship with Equitable, who we have another $9 billion of committee capital to put to work for them in that space. We've put $11 billion to work so far. It has enabled us in this sort of holistic model we have of being a pretty compelling home for teams that wanna scale very quickly. We have a proof statement to show them we can scale them very quickly.
Yep.
The other part is that we have relationships with 40 or 50 other insurance companies that are another $50 billion of our AUM, where we have access, whether it's to their general accounts or separate accounts, to demonstrate our abilities. And we're seeing, in particular, since we have unified our insurance vertical with Equitable and hired Geoff Cornell to be our CIO of insurance. He formerly ran Corebridge CIO and AIG in the U.S. I think we have the credibility and the capabilities across their general account to be able to support. And we do that in a way that is very much client-oriented, client-first. And we have the experience to actually execute that. So we're in more searches. We're talking to more insurers. We're booking more business. It's slow, but it's beginning to accelerate. And we feel pretty good about that pace.
But that will very much, I think, benefit our private alts platform generally. Getting to $100 billion was also predicated on using the private wealth space as an important part of that.
Mm-hmm.
First with our own proprietary business where CarVal has been a big user as has PCI, which is our middle market lending business. It's been the area where we've launched our limited liquidity vehicles both for AB, for PCI, and for CarVal. We've now gotten on two or three other platforms, and we continue to grow that. We are bringing that to Asia, which is the third part of, I think, the puzzle of why we think we have a differential capital-raising advantage versus a number of peers, so we have entree into the insurance space. We have a private wealth network and experience here, and we think we have a differentiated distribution capability in Greater Asia, Greater China, Asia, and Japan.
I gotcha. Let's bet a couple more minutes on this. So, Equitable, you kinda started there. It's kinda been the cornerstone.
Correct.
Of what enabled you to kinda get to where you are now. There's about $9 billion, I think you said, left in commitments.
Correct.
To go. How are you thinking about the pace of deployment, on that nine? But also more importantly, what are some of the other opportunities you see for the two firms to collaborate together?
Let's talk first about what we just did with Ruby Re, which was an investment AB made into a sidecar that RGA, a pretty well-regarded insurer, has booked. We put $100 million into that. We are in the midst of negotiating an IMA with them. But our expectation is, and it's obviously subject to closure and negotiation, our expectation is we'll have $1 billion of private alts that we will be managing on behalf of Ruby Re once it's up and running. We think that's a 24-month kind of funding period to get that up and running. 24 months or so is roughly the same sort of horizon we're thinking about or Equitable's thinking about with respect to their $9 billion. In addition, we're looking at other sidecars from an investment perspective.
Part of the benefit of being part of a larger insurance complex is I'm not looking to my team to underwrite that risk. We worked hand in glove with Equitable.
Mm-hmm.
and were introduced to RGA through Equitable, as a counterparty which had very interesting characteristics vis-à-vis Equitable. They're running, they're writing different risks.
Mm-hmm.
Equitable has a very high regard for RGA's disciplines around it, and frankly, this is a different model for us. We're actually putting capital up.
Mm-hmm.
Which is consistent with a number of other people in the business. But we're doing it with a high degree of confidence that we can at least equal what RGA's modeled IRR is, which is low to mid-teens on these with the incremental profitability of running underwriting, the equity. And we think that that underlying sidecar investment may be an appealing product for either our private wealth channel or others' private wealth channels.
Gotcha.
It's not that I have anything to announce in that regard.
Mm-hmm.
We're just thinking about it, and frankly, it's a very high threshold for us.
Mm-hmm.
'Cause we are the gatekeeper.
Right.
We need to make sure of it. I think having quality counterparties like RGA make that an easier decision for us to do. We're looking at others. I think the issue for us is how much of this would we be willing to do.
Mm-hmm.
We wanna remain a very capital-light business model, but Equitable is there, and it's interesting from a multiple as well as an after-tax basis for Equitable to fund that through us.
Mm-hmm.
So if we wanna make those investments.
And we've seen examples with, obviously, others funding it with third-party capital. You know, you look at what Apollo has done with ADIP and what KKR has done as well.
Exactly.
There's ways to do that as an investment product with getting.
We would like to recycle that capital.
Sure.
So that would be part of our goal to do it.
Got it.
But.
You mentioned the IMA. You know, I'm assuming you guys don't have anything public to announce 'cause it sounds like you're negotiating that. But just sizing what that general account could look like for, you know, for getting the fees.
Well, it's.
But what's the?
Just for us, it would be $1 billion.
A billion of what you asked for. Yeah. Got it. And when you think about other sidecar opportunities like that or other opportunities with other insurance companies, what is the differentiated angle that you guys bring to the table? You know, and does the partnership that you already have with Equitable, does that cut you out of a certain portion of the market?
Actually, I think it's a benefit to us.
Mm-hmm.
First of all, just 'cause I've been asked this question a lot of times. We do business with almost all of Equitable's key competitors already.
Right.
Now, we may not be in their GA, but we're in their separate accounts, for example.
Mm-hmm.
But they're not the big issuers of this. It's much more in term life and fixed annuities, PRT. And it's a network they're much more familiar with and have been very helpful in creating contacts for us to tap into. So I don't see it as a disadvantage. And it's also a global network.
Mm-hmm.
And so we're looking at stuff offshore as well that makes sense, both in Asia and elsewhere, that we would continue to work with their actuarial teams, their risk teams to make sure we're not doing something foolish in terms of our underwriting capabilities.
Yeah.
To get it done. So, I think there's more growth there. I just think, you know, there's a tail risk. And you need to understand that risk.
Right. Let's pivot back to retail for a couple of minutes.
Sure.
Again, it's one of the building blocks you mentioned in getting to that $100 billion in private markets. You guys recently launched AB CarVal Credit Opportunities Fund. This product is a bit different from most retail private credit strategies that are out there, that are largely focused in direct lending. This is not one of those. Like, there's a bit more of a flexible mandate.
It's a multi-sector product.
Yeah.
It's a track record they've had for years. It was, you know, frankly, when CarVal built it, it was the first strategy. So we have a very nice track record to show.
Yep.
For the whole thing. And we think it's a nice diversifying rather than absolute return offering.
Yeah.
particularly for family offices and others who are looking to manage a multi-asset index portfolio.
Yeah. Yeah. So just how are you thinking about distribution of that product externally? Maybe talk a little bit about kinda platforms you're already on. What are your hopes for, you know, for scaling that product? And what's next on the wealth product side from a new.
Sure.
Partner creation perspective?
We're on three platforms already. Can't disclose those. But, we are in front of RIAs. We're in front of, brokers who are looking for those kinds of, diversifying products in their model portfolios.
Mm-hmm.
I think that's interesting. Secondly, we think there's appetite in Europe for similar strategies. And their CarVal is known there anyway. So that could be a helpful step up for them as well. We're also launching AB Lend, which is a limited liquidity direct lending middle market product.
Yeah.
Which will be focused here in the U.S. and in Asia where we think we have a potential to get access to, to the GFIs, the Global Financial Institutions, with whom we distribute into those markets anyway.
Yeah. I gotcha. All right. So a few things going on there. Let's shift gears to talk about the financials for a couple of minutes. You guys, as part of your growth algorithm, you talked about, or you know, improvement in the fee rate, mostly due to the change in the business mix, right? Like with alts growing, private credit, retail.
It's really all business mix.
Growing business mix.
And I guess distribution channel.
Right. Exactly. And that's, you know, both on the retail side and the alts side.
Right.
That's obviously quite helpful. So, talk to us a little bit about how you expect it to progress. The fee rate, I think, is hovering around 40 basis points now.
Correct.
How you expect that to progress into 2025?
We think it's a pretty durable rate. That doesn't mean it couldn't go down one or two or up one or two in a.
Mm-hmm.
In a given quarter. We're very much taken by redemptions, you know, and markets in that regard and new money being put on. But we think it's particularly durable because we see that mix change in our pipeline. We see that mix change in what our clients are talking to us about today, both in retail as well as in the institutional space. But, you know, it's mix dependent, obviously. So if someone is buying private placements from us at a lower fee than middle market lending.
Yeah. Sure.
That's a little bit out of our control. But in any given quarter, it's not that big an increment in terms of the margin degradation or improvement that it would actually contribute. So we feel it's pretty strong.
Yeah.
We're also very much focused, in fixed income, on the retail space, which is a higher fee channel.
Sure. Yeah.
And to date, that's been pretty helpful for us. The you know, the Muni SMA business, which is growing pretty rapidly, is a lowered fee product. But that's all incremental.
Right.
To us, so while it may not be beneficial from a fee rate perspective, it absolutely is beneficial from a profit margin perspective.
Yeah.
To the firm. So I, you know, we're pretty comfortable in the high 30s, low 40s is where this fee rate should be for a while.
I gotcha. I gotcha. That makes sense. Shifting to performance fees for a couple of minutes. It, it doesn't, you know, investors don't spend a whole lot of time thinking about it. But there is a story here as well where it feels like there's a lot more durability and less volatility in that stream of income, when it comes to you guys. And I think a lot of that is a function of the fact that you guys are moving into private credit. And it's just a little more of an incremental fee.
If you look at the underlying driver, it's our middle market lending business.
Yeah.
That's really been the principal driver of it. And that's really, frankly, it's, there's nothing baked in performance fees.
Yeah.
But if you're not in default.
Mm-hmm.
You know, if your client is continuing to perform, which is we have a pretty good track record over the last 10 years doing it, that we feel pretty comfortable that it's durable. And we can see it next year. And we've already said we think we're gonna be at the high end of the performance fee estimates for this year.
Right.
And we're feeling pretty good on where it's looking at for 2025.
Right. So I guess how would you think about the growth algorithm and those performance fees over time? Should it just generally scale in line with your private credit business?
It's a.
Or is that?
I think it's more directed on PCI than others.
Yeah.
You know, where CarVal's focusing, there's less performance fees.
Mm-hmm.
In some of the sort of dedicated strategies, whether it's in aircraft leasing or the asset-backed strategy. But you know, we've doubled the size of that private, I'm sorry, our middle market lending business, since 2017, I think. 2019. No, it's 2019. So we've doubled it in five years. And we're continuing to see more demand. And we are deploying more money there. So I'm feeling pretty comfortable about that business's growth trajectory.
I gotcha. Okay. Let's shift to margins. You guys are running at around 31% margin year to date, give or take. You gave a nice walk in your last earnings deck just talking, talking through the kind of some of the costs related to NYC relocation. That's 100-150 basis points.
Right. And remember, there was a double rent.
Exactly.
So once that falls off, you're kinda like a 32.5, call it. And.
Right.
You know, your baseline for 2025 is 33. That's kinda what you put out there, sort of a, you know, a, a goalpost. Doesn't feel like it takes a lot to get there, and hence, we put it out there as a goalpost.
Exactly. So, help us think about the incremental margin in the business as you grow organically. Markets remain relatively supportive as well.
Look, the markets are supportive.
But what is the goalpost?
We should be doing better than 33.
Right.
But obviously, you know, our incremental margin, what we target is kinda 45%-50%.
Mm-hmm.
So it should be falling mostly to the bottom line to the extent we're able to generate it. Obviously, if markets reverse.
Yeah.
We have the other side of that, but we think we're well-positioned for it. In addition, we have a number we've been pretty aggressive in absolute terms focusing on our underlying, non-comp controllable expenses. That has been one of the reasons we've been relocating people from New York, whether to Nashville, or now from the U.S. to India.
Yep.
As we continue to focus on our underlying costs. We think our G&A expenses will continue to be managed efficiently. And we see some improvement there. And so on balance, I think we are pretty focused on getting those expenses down just as part of our hygiene because.
Yeah.
We're price takers. We're not price setters, and so we recognize that as part of the business.
Yeah. I wanted to wrap things up with a question around just the structure of the company at a higher level. It's a question that comes up a lot. But when you look at AllianceBernstein, you guys are putting up some of the best organic growth from the group, both on the fee side and just the flow side. The multiple, most would argue, doesn't seem to reflect it. Obviously, that's been our view for a little while as well. The structure is part of the issue. The float with Equitable, I'm not sure if there's a whole lot to do there. Probably not. But the structure in terms of publicly traded partnership versus C-Corp, matters as well. So where are you guys in the process of thinking about converting to C-Corp? What are some of the, puts and takes? What are the pluses and minuses?
What do you need to see, to ultimately make a decision?
So on its most basic level, the decision to convert to a C-Corp is a function of how much of a tax drag are you creating by virtue of doing that for your taxable shareholders, of which we have a number. We believe that you'd have to have, depending on how you structure it, anywhere
from two-plus turns.
Mm-hmm.
Multiple. You'd need to be very comfortable in the way you structure it that you can boost it by a couple of multiple points to get there. How do you do that? The one interesting change between sitting here this year versus last year is that we're quite intrigued by what our neighbors north of the border are thinking about as they relocate their headquarters down to the United States.
Yep.
And, to the extent, they are included or can be included into a multiple. I'm sorry, into an index.
Yep. Yep. Yep.
That's very interesting. That's news to us. If AB could get into an index, I think whether it's the S&P 400 or one of the Russell indices.
Mm-hmm.
while we still have a controlled shareholder.
Right.
That is interesting news, and so we watch what they're doing carefully, and they've been and then they would be the second to do it, I guess.
Yeah.
Tradeweb did it as well.
Right. Right.
Is that a discussion point with index providers? I feel like you guys can get that answer from them.
We are talking to them about it.
Yeah. But remember, even if we're inclusive, they'd be willing to include us. Then they have to decide to include us.
Sure.
So that's sort of a separate decision on their behalf. So yes, we're not taking it for granted. We're researching. We don't have any religious conviction.
Yeah.
To stay a publicly traded partnership, even though I think we might be the last one.
Right. Yeah.
And.
Certainly feels like in this space.
Yeah.
Yeah. Well, we're definitely the last one in this space.
Yeah.
I think we would consider it. I think the liquidity issue is a separate one.
Yeah.
And even if we converted, you'd still have that problem.
Yeah.
Because we have like 300,000 shares trading a day at $40.
Mm-hmm.
That's $12 million. You know, if you're a big investor buying in, you're gonna move the share price pretty quickly.
Yep. Yep.
Which I think is a benefit to the existing holders. 'Cause we think there's appetite for it. I mean, if you look at our holders versus our competitors, there's very little overlap.
Right.
So we continue to look at it with interest. We'd have to be mindful of Equitable's, the implications from the Equitable's perspective.
Mm-hmm.
'Cause we have a fiduciary obligation to them as well.
Mm-hmm.
We think there are ways of structuring around that potentially.
Mm-hmm.
But we're open to it.
Yeah.
I guess that's how I would leave it.
Yeah. Does Equitable have any sort of philosophical conviction one way or another, or they're ultimately, you know, maximize.
They don't have to maximize the value.
I think unless there was something adverse to them financially, I think we're open to it.
Right. Got it. Okay. Great. All right. Well, I think we'll leave it there. Thank you so much.
No, my pleasure.
It was great insights.
Appreciate the time.
Thank you.