With institutional clients flying out the door, could salary and comp cutbacks and layoffs once again be coming for AllianceBernstein? These are anxious times for employees at the investment firm, given the track record and the rounds of salary cutbacks and layoffs in 08' and 09' after big drops in AUM.
The asset manager recently announced preliminary assets under management dropped to $461 billion from $473 billion during June 2011, with the firm pointing to negative investment returns and net asset outflows, mostly from institutional business.
AllianceBernstein posted similar losses in May, as AUM decreased to $473 billion from $485 billion in the prior month. A drop in investment returns and, once again, net asset outflows, primarily by institutional customers, were to blame.
A flight in executive management stateside and abroad certainly isn't a good sign. Ignis Asset Management recently snagged AllianceBernstein UK chief executive officer and chairman Claude Chene as head of distribution. Chene came to AllianceBernstein in 1998 to launch the firm's UK and European business. In January, AllianceBernstein's CFO John Howard jumped ship after less than a year there. Since Howard's departure, AllianceBernstein has yet to name a permanent replacement, with the firm's corporate controller Edward J. Farrell serving as interim CFO since then. In January, Augustus Cheh, CEO of AllianceBernstein Hong Kong, left for a spot as president of non-U.S. business at Janus Capital International in their Hong Kong location.
Clients yanked some $126 billion out of AllianceBernstein in the two years ended Dec. 31, 2010, giving the investment manager the distinct dishonor of having the highest withdrawal rate for any U.S.-based publicly traded mutual fund manager during that time.
On the trading side, four New York-based equity traders at AllianceBernstein were fired this week. No comment, as of yet, from the money manager.