In an unexpected announcement on Octobr 12th Alex Cruz, who became Chairman and Chief Executive of British Airways in 2016, is stepping down to be replaced by Sean Doyle, currently CEO of Aer Lingus, who previously spent 20 years at BA.

I have known Alex Cruz since he was CEO at Click Air, a low cost subsidiary of Iberia, which merged with Vueling, another low cost airline, where he subsequently also became CEO.

At that time, I came to know an energetic boss who led a dynamic, growing and profitable airline, held in high regard by his young team.

Move from Vueling to British Airways

Moving to British Airways, Cruz had a clear remit to bring his skills in low cost management to further improve the airline’s own efficiency as it faced not only growing low cost short haul competition, but emerging threats from long haul low cost airlines, such as Norwegian.

Some suggest that cost cutting was his only objective, but this neither matches reality nor recognises the achievements which he has delivered whilst at the airline.

Challenges

There have certainly been difficulties over the past four years. Several IT failures hit the airline and a data breach compromised customer information. To blame Cruz for these is simply lazy. In part legacy systems, which arguably should have been upgraded or replaced years earlier, failed by chance on his watch. A data breach, whilst far from acceptable, is not unique to BA nor to other airlines or indeed other industries. Alex Cruz is highly tech savvy and interested in technology, if anything he was upping BA’s game in this arena and moving it more fully into the

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