Asset managers are hot properties at the moment. Activist investor Nelson Peltz has taken stakes in

Invesco

and

Janus Henderson Group,

pushing them to merge, while

Morgan Stanley

has agreed to pay $7 billion for

Eaton Vance.

One of the hottest in the industry should be AllianceBernstein. It offers a growth story and a nearly 9% yield.

“This is a unique company in the asset management industry,” says Alexander Blostein, an analyst at Goldman Sachs. “Not many companies are growing in the actively managed space.”

Yet AllianceBernstein generates little attention because of its partnership structure and thin public float. The public portion of the company,

AllianceBernstein Holding

(ticker: AB), owns 35%, while

Equitable Holdings

(EQH), the life insurer, holds the other 65%. The partnership units, now around $30, trade inexpensively at 11 times projected 2020 earnings of $2.67 a unit and 10 times estimated 2021 profits of $3.01.

Blostein, who has a Buy rating and $32 price target, says the distribution (the partnership equivalent of a dividend) offers “compelling income with some embedded growth.”

He sees 10% to 15% annual growth in earnings per unit in the coming years, after a mid-single gain in 2020, driven by organic growth and cost-cutting. Given the company’s structure, any earnings gains can be expected to flow through to investors in added distributions.

AllianceBernstein aims to save a projected $75 million to $80 million a year by 2025 by moving its headquarters to Nashville from Manhattan. (Its investment professionals can stay in New York.) That 2018 decision looks smart, given New York’s economic woes stemming from the pandemic.

Formed in 2000 from the merger of the growth-oriented

Alliance Capital Management

with the value-oriented Sanford Bernstein, AllianceBernstein runs $643 billion in institutional, retail, and high net-worth accounts. Nearly half, or $313 billion, is

Asset managers are hot properties at the moment. Activist investor Nelson Peltz has taken stakes in

Invesco

and

Janus Henderson Group,

pushing them to merge, while

Morgan Stanley

has agreed to pay $7 billion for

Eaton Vance.

One of the hottest in the industry should be AllianceBernstein. It offers a growth story and a nearly 9% yield.

“This is a unique company in the asset management industry,” says Alexander Blostein, an analyst at Goldman Sachs. “Not many companies are growing in the actively managed space.”

Yet AllianceBernstein generates little attention because of its partnership structure and thin public float. The public portion of the company,

AllianceBernstein Holding

(ticker: AB), owns 35%, while

Equitable Holdings

(EQH), the life insurer, holds the other 65%. The partnership units, now around $30, trade inexpensively at 11 times projected 2020 earnings of $2.67 a unit and 10 times estimated 2021 profits of $3.01.

Blostein, who has a Buy rating and $32 price target, says the distribution (the partnership equivalent of a dividend) offers “compelling income with some embedded growth.”

He sees 10% to 15% annual growth in earnings per unit in the coming years, after a mid-single gain in 2020, driven by organic growth and cost-cutting. Given the company’s structure, any earnings gains can be expected to flow through to investors in added distributions.

AllianceBernstein aims to save a projected $75 million to $80 million a year by 2025 by moving its headquarters to Nashville from Manhattan. (Its investment professionals can stay in New York.) That 2018 decision looks smart, given New York’s economic woes stemming from the pandemic.

Formed in 2000 from the merger of the growth-oriented

Alliance Capital Management

with the value-oriented Sanford Bernstein, AllianceBernstein runs $643 billion in institutional, retail, and high net-worth accounts. Nearly half, or $313 billion, is