AllianceBernstein Holding LP to Possibly Relocate Staff Outside of NY
In an attempt to cut back on expenses, AllianceBernstein Holding LP is considering relocating some of its staff to outside New York. This is just the most recent example of cut backs by money managers in response to investors putting money into index-tracking funds with lower fees.
These plans, which aren't likely to go into full effect until late 2018, are part of a bigger push to cut costs as its parent company AXA SA makes an initial public offering of a U.S. life insurance and asset management firm combined, according the Wall Street Journal's sources familiar with the matter. New locations being considered for the New York employees of AllianceBernstein include Charlotte, North Carolina, where AXA is already expanding its mark, as well as San Antonio, where AllianceBernstein has an office already.
According to the WSJ, “No final decisions have been made and the firm may ultimately decide to keep its staff in New York, the people said. The firm's chief executive told staff in a town hall meeting last week that it was considering a number of options for its real estate footprint, including moving some staff out of state, one of the people said. AllianceBernstein has 3,438 employees globally, according to its annual report, with most based in New York, London and Hong Kong. It has been working to downsize its global office footprint since 2010. At the end of last year, it occupied about 40% of the 992,043 square feet of space at its New York headquarters under a lease that runs through 2024, and sublet the balance. It also rented space in two other New York City locations and in White Plains, N.Y., according to the annual report.”
Due to unprecedented changes in the financial industry, money managers are working to cut back on costs. Investors no longer believe that active managers can pick winners and have instead decided to pay less and put their money into passive index and exchange-traded funds, which have increased in popularity by reaching new highs in recent months.
At the same time, financial advisors are offering more and more fee-based portfolios to clients that are filled with lower-cost funds. All this has led to many traditional asset managers struggling to keep assets and make changes to their fee structures, chase mergers and acquisitions or rethink their strategies and diversify their businesses. Many of these moves have been tried by AllianceBernstein.
Due to unprecedented changes in the financial industry, money managers are working to cut back on costs.
Peter S. Kraus has served as the Chairman and Chief Executive Officer of AllianceBernstein from 2008 through 2017