NEW YORK, Sept. 14, 2016 /PRNewswire/
-- AllianceBernstein L.P. ("AB"), a leading global investment
management firm, today announced it has secured its first client
with funding of more than $340
million for its hybrid active/passive multi-manager
target-date series in a collective investment trust (CIT) format.
Announced last year, AB's Multi-Manager Retirement Trusts offer
plan sponsors independent selection of funds from highly regarded
investment managers in one portfolio at more attractive economics
than many mutual fund offerings. Mercer, a leading global
investment consultant, provides third-party manager research and
selection for the portfolio assets and AB manages the glide path
design and management. Actively managed strategies comprise about
60% of the portfolios with about 40% passively invested.
The client, a financial services firm, selected AB's target-date
funds (TDFs) to replace its existing qualified default investment
alternative (QDIA), passive TDFs. As part of the transition, the
client did a plan re-enrollment, where participants are given the
choice of selecting their investment options or being allocated
into the age-appropriate target-date fund. This resulted in
approximately 80% of plan assets being invested in AB's target-date
fund, therefore more appropriately allocating participants'
accounts than when they determine their investment on their
own.
"The appeal of this new mandate demonstrates that many plan
sponsors are interested in more sophisticated solutions that offer
a range of assets classes that are simply not available or
well-managed in a passive index strategy," said Dan Loewy, Chief Investment Officer and Co-Head
of Multi-Asset Solutions at AB.
AB has long been known as a leader in customized target-date
solutions, where it manages more than $32
billion. The launch of its CIT portfolios was a continued
build out of AB's broader target-date platform which includes both
custom and packaged solutions, like its multi-manager mutual fund
series and a multi-insurer lifetime income solution.
"The goal of these new target-date trusts is to package the
learning we have gained from managing over $30 billion in custom target-date assets for over
twenty of the largest, most sophisticated plans in the industry and
make that best thinking available to mid-sized plans that desire a
commingled solution," said Richard
Davies, Senior Managing Director and Global Head of Defined
Contribution at AB.
To learn more about the AB's defined contribution solutions, go
to www.abdc.com.
About AB's Multi-Asset Solutions Group
AB's
Multi-Asset Solutions Group is a dedicated team of more than 25
investment professionals that utilizes its deep capital markets
expertise, research insights and a full range of risk/return
sources as building blocks to create integrated multi-asset
investment solutions tailored to the needs of each client. These
include glide path strategies like target-date and lifetime income
solutions for defined contribution plans, asset allocation
strategies and solutions targeting unique market index and factor
exposures.
About AB
AB is a leading global investment management
firm that offers high-quality research and diversified investment
services to institutional investors, individuals and private wealth
clients in major world markets.
At June 30, 2016, AB Holding owned
approximately 35.9% of the issued and outstanding AB Units and AXA,
a worldwide leader in financial protection, owned an approximate
63.8% economic interest in AB.
Additional information about AB may be found on our website,
www.abglobal.com.
A WORD ABOUT RISK
Market Risk: The market values of
the portfolio's holdings rise and fall from day to day, so
investments may lose value. Credit Risk: A bond's credit rating
reflects the issuer's ability to make timely payments of interest
or principal—the lower the rating, the higher the risk of default.
If the issuer's financial strength deteriorates, the issuer's
rating may be lowered and the bond's value may decline. Municipal
Market Risk: Debt securities issued by state or local governments
may be subject to special political, legal, economic and market
factors that can have a significant effect on the portfolio's yield
or value. Interest Rate Risk: As interest rates rise, bond prices
fall and vice versa—long-term securities tend to rise and fall more
than short-term securities. Inflation Risk: Prices for goods and
services tend to rise over time, which may erode the purchasing
power of investments. Leverage Risk: Trying to enhance investment
returns by borrowing money or using other leverage tools—magnify
both gains and losses, resulting in greater volatility. Derivatives
Risk: Investing in derivative instruments such as options, futures,
forwards or swaps can be riskier than traditional investments, and
may be more volatile, especially in a down market. Below Investment
Grade Securities Risk: Investments in fixed-income securities with
lower ratings (commonly known as "junk bonds") tend to have a
higher probability that an issuer will default or fail to meet its
payment obligations. Local Economy Risk: This portfolio may contain
municipal securities issued by the Commonwealth of Puerto Rico as well as other local governments
whose current economic conditions could exacerbate the risks
associated with investing in these securities.
The Multi-Manager Retirement Trusts are only available for
investment by qualified retirement plans and are not offered for
sale to the general public. The Trusts are not mutual funds and
their units are not deposits of AB Trust Company, LLC or any AB
affiliate and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other agency. The Trusts are exempt from
investment company registration under the Investment Company Act of
1940, and purchases and sales of Units are not subject to
registration under the Securities Act of 1933.Management of the
Trusts, however, is generally subject to the fiduciary duty and
prohibited transaction requirements of the Employee Retirement
Income Security Act of 1974, as amended (ERISA) and the rules and
regulations of the United States Department of Labor promulgated
thereunder. AllianceBernstein L.P. is the Trust's investment
advisor and provides investment management services. AB Trust
Company, LLC is the Trust's trustee and provides customized
securities processing services.
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SOURCE AllianceBernstein L.P.