MutualFundWire.com: A $627B-AUM U.S. AM Partners With a European Bank

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Tuesday, November 22, 2022

A $627B-AUM U.S. AM Partners With a European Bank

A $627-billion-AUM (as of October 31), publicly traded asset manager in the U.S. is teaming up with a publicly traded European bank. Yet deal is focused on cash equities and equity research, not asset management.

Seth P. Bernstein
AllianceBernstein
President, CEO

Today, Seth Bernstein, president and CEO of AllianceBernstein [profile], and Slawomir Krupa, head of global banking and investor solutions at Societe Generale, confirm that they plan to create a new joint venture, combining Bernstein Research with SocGen's "integrated equity capital markets, equity derivatives and prime services platforms." Yet the AB team clarifies that the new JV "is not expected to have an impact on AllianceBernstein's asset management busienss or Bernstein Private Wealth Management's business."

SocGen will have a 51 percent (i.e. majority) stake in the new JV, while AB will have the remaining 49 percent, so the deal will involve "equalization payment from Societe Generale to AllianceBernstein." SocGen will also have the option to ramp up 100-percent ownership of the JV after five years.

The deal, which has been approved the boards of both Nashville-based AB and Paris-based SocGen, is expected to close by the end of next year. Ardea Partners advised AB on the deal, while Latham & Watkins LLP provided legal counsel.

The new JV will use the Bernstein name and will be based in London. Bernstein Research CEO Robert van Brugge is slated to become CEO of the JV (specifically for an initial, five-year term), while SocGen cash equities chief Stephane Loiseau is slated to become the JV's deputy CEO.

(News of the AB-SocGen deal comes nine years after SocGen spun off a U.S. asset manager and seven years after SocGen sold its stake in a European asset manager JV.)

Bernstein lauds SocGen as "a strategic partner who is committed to strengthening and growing [AB's] world-class cash equities and research business." Krupa, in turn, describes the deal as creating "an indisputable leader across the equity busines for the benefit of ... issuer and investor clients."

"This partnership gives us the opportunity to participate in the high added value segments of the global equities business," van Brugge states.

"It would also allow us to preserve and expand our firms' unique strengths, expertise, and cultures," Loiseau states.

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