Thank you for standing by and welcome to the AllianceBernstein First Quarter 2021 Earnings Review. At this time, all participants are in a listen-only mode. After their remarks, there will be a question-and-answer session and I will give you instructions on how to ask a question at that time. As a reminder, this conference is being recorded, and will be available for replay for one week. I would now like to turn the conference over to the host for this call, Head of Investor Relations for AB, Mr. Mark Griffin. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to our first quarter 2021 earnings review. This conference call is being webcast and accompanied by a slide presentation that's posted in the Investor Relations section of our website. With us today to discuss the company's results for the quarter are Seth Bernstein, our President and CEO; and Ali Dibadj, CFO; additionally, Matt Bass, Head of Private Alternatives will join us to discuss our Private Alternatives business; and Kate Burke, COO, will join us for questions after our prepared remarks. Some of the information we'll present today is forward-looking and subject to certain SEC rules and regulations regarding disclosure. So I'd like to point out the Safe Harbor language on Slide 2 of our presentation. You can also find our Safe Harbor language in the MD&A of our first quarter 10-Q, which we filed earlier this morning. Under Regulation FD, management may only address questions of material nature from the investment community in a public forum. So please ask all such questions during this call. Now, I'll turn it over to Seth.

Good morning and thank you for joining us today. In the first quarter, we drove balanced growth across all three channels, geographic diversification and differentiated client-focused offerings, specifically across ESG, active equities, alternatives, and municipals led the way. Near-term investment performance rebounded strongly in fixed income, while solid long-term performance across other asset classes. And our institutional pipeline grew to a record annualized fee base led by alternatives. For the quarter we posted active organic growth of 4%, while expanding our operating margin to 31.7%. We delivered 27% growth in both earnings and distributions to unitholders. Let's get into the specifics. Starting with the firmwide overview on Slide 4. Gross sales were $33.3 billion, our second highest quarter since the pre-financial crisis 14 years ago. Sales were up $1.7 billion or 5% from a year ago and up 6% from the prior quarter. Firmwide active net inflows were $6.5 billion, a 4% annualized organic growth rate. Quarter-end assets under management of $697 billion were the highest since the pre-financial crisis, increasing 29% year-over-year and 2% from the prior quarter. And average AUM was $689 billion, increased 14% year-over-year and 6% sequentially. Slide 5 shows our quarterly flow trend by channel. First quarter net inflows were positive in each channel. Retail generated its second strongest gross sales ever with net inflows of $2.7 billion as strength in active equities and munis more than offset outflows in taxable fixed income, showing the balance we built in our retail business. Institutional sales of $4.9 billion led to net inflows of $800 million driven by growth in taxable fixed income. In private wealth, gross sales increased 54% year-over-year, and we're up 46% sequentially with continued advisor productivity gains. Net inflows of $1.7 billion reflected improved investment performance and heightened client risk appetite. Now let's turn to investment performance beginning on Slide 6. In the first quarter, yields rose meaningfully in nearly all developed fixed income markets, reflecting inflationary concerns amidst expectations for a strong global economic rebound. With the exception of high-yield, bond returns were negative and credit sectors outperformed governments. Despite the first quarter’s yield-driven price declines, global credit sectors have rebounded strongly over the past 12 months following the COVID-19 driven sell-off in March of last year. Our strategies with global and multi-sector credit positioning including global high-yield and American income have benefited during this risk-on period. Furthermore, each of the five income strategies on our retail income platform, ranked in the top quartile of their respective Morningstar categories over the one-year period. For the one-year period ended in March, 91% of our fixed income assets outperformed a strong rebound versus prior periods. 55% of our assets have outperformed over the three-year period and 65% over the five-year period. Our municipal lineup continued to outperform with 9 out of 10 funds in the top quartile across each time period. We saw strong inflows. This quarter’s income was in demand. For example, our municipal bond inflation fund, which we believe is the only fund in the industry to combine muni bonds and 100% hedge to inflation to tax-efficient CPI swaps. So solid inflows, benefiting from inflationary concerns which were otherwise negative real products. In equities, our long-term performance remains solid as 57% of assets outperformed over the three-year period and 67% outperformed over the five-year period. Our one-year equity performance of 38% of assets outperforming, reflecting our lower weightings relative to heavy benchmark concentration of mega cap stocks with abnormally high exposures to risk factors like beta and momentum. It's worth noting that year-to-date portfolio of these five stocks held in proportion to the market would have underperformed the S&P 500 by nearly 800 basis points. We've positioned both of our portfolios to participate in greater market breadth as the economy started to reopen. In the first quarter, 62% of our equity composites outperformed their benchmarks led by our value and core strategies. Growth strategies had held their ground. Our sustainable U.S. thematic equities Fund One Citywire U.S. Offshore award beating over 2,000 funds available to U.S. Offshore investors for providing the most value added over a three-year period. Additionally, our concentrated growth in large cap growth funds were both upgraded to bronze medalist ranked funds by Morningstar, a designation received by only 5% of funds with assets over $100 million. Moving on to our client channels beginning with retail on Slide 7. Gross sales are the second strongest on record, 5% below our record first quarter 2020, and up 30% sequentially. Net inflows were $2.7 billion, driven by a 17% annualized organic growth in equity, active equities, our 16th straight quarter of active equity inflows. U.S. retail SMA sales accelerated and we had a strong quarter in Japan. Municipals grew by 18% annualized, helping to offset higher taxable fixed income redemptions in our high income suite. As shown on the upper left chart, a balanced and diverse product offering has led to consistent organic growth with the retail channel generating positive net inflows 9 in the last 11 quarters. Geographic balance continues with the U.S. at 36% of sales, Japan, EMEA, Latin America at 34% of sales and Asia ex Japan at 30%. We now have 61 products of more than $1 billion each balanced across asset classes. Our equity funds ranked 12 of 454 managers with several of our largest funds posting strong flow rankings as shown on the bottom right. Munis are ranked 14th out of 110 managers. Now I'll discuss institutional on Slide 8. First quarter gross sales of $4.9 billion were up 26% year-over-year, driven by diverse fixed income sales and were down 51% sequentially. Fixed income sales were robust, up 300% driven by credit, U.S. investment grade corporate, securitized debt, CLO and emerging market debt. Active equity sales of $900 million saw strong growth in ESG, and our active equities unfunded pipelines reported the third strongest AFB since we began tracking this back in 2011. Speaking of ESG, yesterday we announced the groundbreaking commitment as the founding member of the Corporate Affiliate Program at the newly launched Columbia Climate School. This is the second phase of our relationship that began in 2019, facilitating ongoing interaction between AB’s investors and Columbia University scientists and experts on climate issues, as they arise in the investment process across portfolios, sectors, asset classes, and regions. Our institutional pipeline grew to $15.2 billion at quarter end, up 25% sequentially driven by growth in alternatives. The AFB of well over $50 million is a record and represents a 20% compound annual growth since we began tracking in 2011. As shown in the bottom right, notable pipeline additions include $1.5 billion of lower fee CRS, $1.1 billion in our fourth U.S. commercial real estate debt fund supported by equitable, $1 billion in Euro CRED also supported by equitable, and $750 million in U.S. investment grade corporate. Moving to private wealth management on Slide 9. Gross sales of $5.4 billion increased by 54% year-over-year and 46% sequentially, with strong continued improvements in advisor productivity. Combined with lower redemptions, we've generated net inflows of $1.7 billion, reflecting improved investment performance and heightened client risk appetite. Increasingly, clients actively deployed cash into long-term allocations, and we also saw a notable increase in pre-IPO planning versus the prior year, which bodes well for future funding. We raised $106 million in private credit and $75 million in the first close of our private equity fund of funds. As shown on the bottom right, we continue to experience strong growth in muni impact, ESG and our proprietary separately managed equity tax-loss harvesting product. We’re planning for a significant acceleration and new product launches in 2021 across a diverse array of funds including alternative ESG, and SMA platforms. I’ll finish our business overview with the sell-side on Slide 10. Bernstein Research revenues increased 1% sequentially and we’re down 8% versus last year’s extraordinarily volatile first quarter. Growth in Asia continues to be strong with trading commissions at 50%, compounding similar prior year gains. India continues to show outsized growth stemming from focused investments. Strong increases in U.S. market trading volume shown on the bottom left graph were driven by higher mix of retail investors. As you know, our business remains institutionally focused. That said, we saw generally healthy trading volumes across our desks, despite volatility declining from prior periods. We experienced good momentum for our sell-side offerings with research checks up 15% in the quarter. Progress on our strategy in the first quarter is shown on Slide 11; 57% of our equity assets and 55% of our fixed income assets are outperforming over three years and 67% of equities and 65% of fixed income are outperforming over five years. Near-term performance in fixed income improved to 91% of assets outperforming. Our geographic and product balance drove consistent organic growth across all channels, with retail positive nine of the last 11 quarters in institutional positive seven of the last eight quarters. Our institutional pipeline now has a record fee base of well over $50 million, with alternatives accounting for over half of the total. We closed on $900 million in our fourth U.S. Commercial Real Estate Debt fund and closed on $400 million in our second CLO. Private wealth had strong sales and net inflows, and we’re executing on a diverse product pipeline for 2021. Differentiated products continue to amplify growth, including our ESGs Portfolios with Purpose now at $21 billion in AUM up 27% sequentially. We are committed to managing our business to deliver strong incremental operating margins. Our first quarter adjusted operating margin of 31.7% was up 410 basis points year-over-year. We’re enhancing unitholder distributions up 27% versus the prior year period. From time-to-time going forward, I’ll be inviting key members of our operating committee to participate in our earnings calls to highlight established and emerging areas of our business. Today, I’m delighted to introduce Matt Bass, who will share some comments followed by Ali Dibadj, who will wrap up with our financials. Matt?

Thanks, Seth, and good morning, everyone. I’m going to discuss our private alternatives business at AB. History, the current platform, our growth strategies, and why we believe AB is well positioned to continue to attract great investment talent and meet our clients’ needs. Before we dive in, I want to provide some context behind the growth of alternatives at AB more broadly. Post-financial crisis, we’ve invested significantly in diversifying the firm, growing our fixed income franchise, growing and diversifying our equity franchise, and building out our multi-asset and alternative capabilities. We accomplish this through a combination of organic growth and product development, as well as targeted inorganic growth, acquisitions, team lift-outs, and team build-outs. As you can see on Slide 13, since 2010, we’ve added 10 diversifying alternative investment capabilities to the firm, across both private and public markets. Turning to Slide 14, in private alternatives, our focus has been on credit-oriented strategies. Core competency that aligns with the firm’s long tenure liquid credit business is a key component of our DNA. I’m showing this to you as many of our alternative peers can appreciate on an apples-to-apples basis AB has built a $125 billion credit business of which private alternatives represent approximately $20 billion. This sits alongside our private placement business, which manages nearly $12 billion in AUM and our CLO business, which was launched in 2020 with backing from equitable and it’s a direct extension of our fully integrated AB’s leveraged finance platform. Collectively, these strategies represent more than 25% of our total credit AUM. On Slide 15, I’ll review our current platform before we get into the growth strategy. Today, AB’s private alternatives business has scaled capabilities across private credit and real estate including U.S. direct lending, a business we call AB Private Credit Investors, U.S. commercial real estate debt, European commercial real estate debt as well as energy. The business currently has committed capital of $20 billion. Let’s talk about some of these businesses. Our direct lending business AB Private Credit Investors was started in 2014 via team lift-out from Barclays, where we hired a core team of five with an established track record and initial backing from equitable. Over the past seven years, we’ve grown from five to more than 60 professionals focusing on the U.S. middle market. Since inception, the business has deployed approximately $13 billion, investing over 200 middle market companies with approximately to $11 billion in committed capital. We manage both pool vehicles and separate accounts targeted at multiple client segments. Our commercial real estate debt business includes U.S. and European lending businesses. Our U.S. business was started in 2012 via team build-up. Since its launch, we’ve deployed nearly $6 billion, financing more than 100 properties across property types. The business currently has $6.7 billion committed capital, and we manage both pool vehicles and separate accounts on behalf of a global institutional investor base, and are currently in the market with our fourth transitional lending fund having announced initial closing earlier this year. We entered the European commercial real estate debt market late last year. Again, this follows the same strategy we have deployed in the past targeting specific investment opportunities, meeting with various teams and aligning on the right fit. Based in London, the team currently oversees two mandates focused on transitional and opportunistic lending across Europe in the UK. As with our direct lending business, this launch is backed by equitable with a $1 billion commitment, representing another example of the important strategic relationship we share with equitable. Lastly, our energy offering was launched in 2016 and includes two vintages with $600 million in committed capital. Additionally, we have other alternative strategies that we’re growing. Broadly speaking across the private alternatives platform, performance targets vary, depending upon strategy vehicle type. We have generated investment performance that’s in line with our client commitments. Turning to Slide 16, let’s talk about our growth strategy. Looking forward, the growth backdrop for the private business is very promising. Private market strategies are growing at two to four times the rate of traditional public market strategies with a favorable supply and demand backdrop. On the supply side, there’s a continued share shift from bank and capital markets financing to private financing, owing to speed, flexibility, and scale of private capital offers, among other advantages. On the demand side, clients are increasingly allocating to private markets in search of income diversification and to take advantage of illiquidity premiums. With this as a backdrop, our vision for private alternatives at AB is to create an industry-leading platform in terms of breadth of credit-oriented private market solutions and our client engagement. Our growth strategy features both organic and inorganic growth, both supported by the firm’s access to strategic capital sources, notably permanent capital through our relationship with equitable, private wealth business, as well as our global institutional and retail footprint. Organic growth has historically been driven by scaling our existing platforms within their core strategies, as well as extending into adjacent strategies. This is expected to continue going forward across all of our existing businesses. Think of this as both growing the tree trunk and adding branches to the tree; growing the trunk by scaling existing funds and launching new funds targeting new client segments, adding branches by leveraging our existing teams or investment capabilities to extend into adjacent asset classes or strategies. Let me give you a few examples. On the real estate side, our U.S. business has historically focused on lending against transitional assets. We are extending this into stabilized lending, leveraging our origination network and credit process. We’re also launching higher yielding income-oriented strategies leveraging the same team and process simultaneously allowing us to extend the high net worth investor market. And on the private credit side, our direct lending business has a strong presence in growth industries such as technology-enabled services and IT infrastructure. We’ve leveraged this industry expertise, as well as company and financial sponsor relationships to build the growth stage capital business, which provides debt and equity capital to growth companies. In addition to organic growth, we have platform gaps that we will continue to fill through targeted acquisitions and team lift-outs. We’re not going to be everything to everyone. Our growth will be focused towards large growing end markets where we have an edge. Geographically, our platform is currently weighted towards the U.S. from an investment perspective. Expansion of our real estate credit business into Europe was the first step of geographic expansion in both Europe and Asia represent opportunities that we’re considering across investment segments. We also have platform gaps including private asset-backed as a complement to our existing direct lending business, infrastructure renewables as well as special situations. These large, scalable end markets are also aligned with our clients’ needs notably equitable strategy to improve yield and its general account by reallocating assets to higher quality liquid opportunities. This has led to a virtuous cycle with the ability to deliver additional yield to our partners’ balance sheets, and at the same time, seed new strategies with permanent capital, enabling AB to continue to expand our business. Equitable permanent capital has provided the necessary scale to broaden the commercialization of our strategies to AB’s global institutional and retail distribution channels, including our private wealth management channel AB Bernstein. We’re collectively across these channels we’ve been successful in raising third-party capital equal to four times the amount of the initial founder seed. On Slide 17, we answer the question, why AB? Since 2010, AB has completed 14 team lift-outs and acquisitions of which 10 have been within alternatives as I previously mentioned. One of the questions we often get is, why AB? How do you attract teams in a competitive market? This slide is an excerpt from a presentation that we use to proactively face the market to source opportunities and engage with teams. The market for talent is competitive, and the teams and companies we are engaging with have multiple options. I think we differentiate ourselves in terms of AB’s commitment to building this business as well as the strategic capital sources that I just discussed. One key factor in our model is the desire to maintain a particular team’s investment process and autonomy. We want to facilitate consistency in the team’s approach so that they are best positioned to continue to deliver attractive returns for our clients. We get comfortable with providing this autonomy through a detailed upfront diligence on both the market segment and the target investment team. However, we’re also strategic about thoughtfully connecting these teams to the broader firm, including technology, operations, and distribution. Through this, we believe we’re able to offer our clients the focus that comes from a dedicated investment team, combined with the institutional resources of a global firm. Lastly, another important value proposition is how we engage with our teams throughout the process from initial contact through acquisition and commercialization. We have a dedicated business development team, networks in partnership with the acquired team, and the broader firm to drive growth.

Thanks, Matt. A great look into a key part of our business and strategy. Let’s start with a GAAP income statement on Slide 19. First quarter GAAP net revenues of $1 billion increased 15% from the prior year period. Operating income of $260 million increased 46%, and operating margin of 25.9% increased by 260 basis points. GAAP EPU of $0.81 in the quarter increased by 29% year-over-year. As always, I’ll focus my remarks from here on our adjusted results, which remove the effect of certain items that are not considered part of our core operating business. We base our distribution to unitholders on our adjusted results, which we provide in addition to and not as a substitute for our GAAP results. Our standard GAAP reporting and reconciliation of GAAP to adjusted results are in our presentation appendix, press release and 10-Q. Our adjusted financial highlights are shown on Slide 20, which I’ll touch on as we walk through the P&L shown on Slide 21. On Slide 21, beginning with revenues, net revenues increased 10% for the first quarter versus the same prior year period. Base fees increased 11% for the first quarter versus the prior year period, reflecting 14%, higher average AUM, which grew across all three distribution channels partially offset by slightly lower fee rates. The first quarter fee rate of 38.6 basis points was essentially flat sequentially. We continue to believe that although our fee rate may be volatile from time to time, given large mandates in our pipelines that may skew averages, the long-term trend should be grinding higher. First quarter performance fees of $16 million increased by $10 million versus the prior year period, due primarily to higher fees earned on our private middle-market lending business. First quarter revenues for Bernstein Research Services decreased by 8% from the first quarter of 2020, reflecting higher client trading activity a year ago, driven by outsized market volatility, but missed the onset of the COVID-19 pandemic. We incurred investment gains of $2 million in the first quarter primarily from capital related as compared to losses of $7 million in the prior year period. Moving to adjusted expenses, all in our total first quarter operating expenses of $560 million increased 4% year-over-year. Total compensation and benefits expense increased 10% in the first quarter due to higher incentive compensation driven by higher revenues. As expected, compensation was 48.5% of adjusted net revenues for the first quarter flat with the prior year period. Given current market conditions, we plan to accrue compensation at a 48.5% ratio in the second quarter of 2021 with the option to adjust accordingly throughout the year, if market conditions change. As we stated last quarter, expectations for our full year comp ratio should consider that performance fees have become a bigger piece of our mix, which may drive the comp ratio up. Moreover, as we previously mentioned, fringe benefits may ramp up this year post-COVID. Promotion and servicing costs declined 21% in the first quarter, due to lower T&E and lower muni costs owing to the COVID-19 pandemic. Looking forward, we expect promotion and servicing spend levels to return closer to more normalized levels in the second half of 2021. As travel and meetings resume, the pace at which these pickup remains uncertain. G&A expenses increased by 2% in the first quarter versus the same prior period. For the first quarter, higher occupancy costs related to the Nashville relocation, ancillary taxes, portfolio servicing and unfavorable foreign exchange translations were partially offset by lower errors. Interest expense declined by $1.5 million, and tangible expenses declined by $5 million from a year ago, the latter reflecting the absence of the quarterly amortization charge associated with the Bernstein acquisition, which ended in the third quarter of 2020. First quarter operating income of $260 million increased 26% versus the prior year period as revenue growth outpaced expense increases. First quarter operating margin of 31.7% was up 410 basis points year-over-year, reflecting the operating leverage of our business. Incremental first-quarter margin was over 70% as compared to the prior year period. We continue to manage the business to an incremental margin of 45% to 50%. Not necessarily every year, but on average over time. The first quarter effective tax rate for AllianceBernstein L.P. was 6.4% reflecting discrete items. We continue to expect the effective tax rate for 2021 of approximately 5.5% to 6%. I’ll finish with an update on our planned corporate headquarters relocation to Nashville. Our relocation continues to proceed very well. At quarter end, we had 850 Nashville-based employees, two thirds of the way toward the target of 1250. Our major offices in the U.S. and EMEA, we plan to begin returning to the office early in the third quarter, which includes moving into our new national headquarters building. For the first quarter, estimated expense savings related to our national corporate headquarters relocation totaled $10 million in better transition costs of $7 million, resulting in a net $3 million increase in operating income or net $0.01 accretion to EPU. Of the net $3 million, approximately $70 million is compensation related savings offset by $4 million of increased occupancy costs. For 2021, we continue to expect the accretion of around $0.02 per unit increasing each year thereafter. We continue to expect ongoing annual expense savings beginning in 2025 once the transition is over to be towards the upper end of the range of $75 million to $80 million.

Thank you, Ali. Turning to Slide 23. In the first quarter, we continue to make progress on the dimensions we previously outlined. We drove 4% active annualized organic growth with growth across channels, each channel led by active equities, alternatives, and municipals. We expanded our suite of higher fee alternatives in our strategic partner Equitable leading multiple offerings, as Matt discussed, our future offerings align with their strong mutual interest in growing our yield-enhancing alternative strategies. Closely managing spending as well as continued COVID-19 related travel and meeting restrictions enabled us to leverage double-digit top line growth, driving strong incremental margins well above targeted levels. As a partnership, we have a durably low tax rate, and we will pay a distribution of $0.81 per unit for the first quarter, a robust annualized yield of 8%, and a low rate environment. With that, we are pleased to take your questions.

Thank you. Our first question comes from Dan Fannon at Keefe, Bruyette & Woods, Inc.

Thanks. Good morning. My question is on the pipeline and kind of the momentum in the business. It seems like there’s a bit of a shift more towards fixed income and alternatives versus equity that we’ve heard from you in the past. Can you maybe talk just a bit about the dynamics, and also in the context of what’s happening broadly in the market and the kind of growth the value rotation?

Thanks for the question, it’s Seth. Look the pipeline remains quite strong. As we indicated at $15.2 billion, there has been a change in the mix of our pipeline. Part of that is a function of the lumpiness. In some respects, it’s some big mandates in fixed income and in CRS, which is our customized retirement solution. So those do have a weight from a size perspective, but have much less of an impact from a revenue perspective. If you look within the pipeline, we had about $6 billion odd incremental. We had about $6 billion to $24 billion of incremental ads in the quarter, and the pipeline is about 15% equities, 20% fixed income, 40% odds, and the rest is in our multi-asset area, which would include our customized retirement solutions. The activity level we are seeing with consultants from some large institutions hasn’t abated at all. But the mix is changing, we are seeing more interest in value as a general statement, but we’re still seeing a number of equity mandates. So I guess, I would say the size of the underlying mandates doesn’t necessarily reflect the actual amount of activity and revenue when and – the revenue and the average earnings rate that we see on the assets we’re actually winning.

Okay, that’s helpful. And then just as a follow up, just want to confirm or clarify on the normalization of kind of promotion and servicing is that, we are going back to 2019 or kind of what’s the right kind of framework, I understand the ramp could be dependent on a lot of factors. But when you characterize kind of normal, what would that be?

Yes, thanks for the question. So, look, as you say, it’s hard to tell. It’ll depend on client needs, it’ll depend on what competitors do. We certainly would like to have some savings versus historical normalized levels. It will be higher than 2020. We all hope, given what’s going on right now. And we continue to believe in that. Probably not 2019 levels on a normalized basis, but it’s hard to tell how much we think we can save versus that. So 2021 should be higher than 2020 for sure. Maybe not as high as 2019 is how we think about it at this point.

Great, thank you.

Our next question comes from the line of Mike Carrier from Bank of America.

Hi, guys, this is actually Shaun Calnan on for Mike. So you mentioned infrastructure and renewables as areas that you’re looking to grow in alternatives. Can you discuss your current offering, if any, and how quickly you can build that offering, given the increased interest in these products?

Sure, Shawn, happy to answer that. This is Matt. So, as I mentioned earlier, the growth strategy on the private wealth side is two pillars: organic growth, scaling core strategies, and extending those teams in inorganic growth. On the inorganic side, we're certainly being led by our client demand, global client demand, notably equitable. Within that, the infrastructure and renewable space is an area of focus. So we don't currently have an offering there, but that is one of the large-scale win markets that we're looking at with equitable regarding potential expansion in the future.

Our next question comes from John Dunn.

Thanks, guys. Could you maybe give us kind of a check-in on the temperature of what you're seeing as far as M&A and team lift-outs with the markets being a bunch, but secular pressures not going anywhere?

Sure, happy to do that, John. So, look, there's a lot of M&A activity in the sector, large and small. Our view is that it will likely continue precisely to the pressures you've seen that you're describing. Look, we see all the flow, we remain quite selective and shrewd about our strategy, we're not going to become enticed by the next shiny object. And look, we believe that the markets have spoken. Things that we said before which is that M&A mainly to cut costs has a very low probability of success, no matter the size. The probability is much higher for M&A, if you can bring together complimentary traits, whether that be product, channels, skills, geographies, or some combination of those ideally. And that's where we continue to look, and again, are in the flow. We believe we are coming from a position of strength, hopefully the past few quarters suggest that and so we’ll stay on top of the M&A activities out there. We'll be in the mix, but we're only going to do anything that again, fits our criteria of bringing together complementary skill sets of our firm. Of course, as you heard from Matt, alternatives is a big part of that focus for us. And so that's where we're going to be very, very focused. And so in particular, that's where we're going to be looking.

Make sense. And then as my follow-up, maybe just looking at your update on the main investment areas on the distribution side, maybe different parts of the channels and geographically.

Sure, it's Seth. Let me start with institutional. I mentioned it a bit earlier, the ramp we’re seeing around our backlog. We are seeing pretty strong activity in both Europe and U.S. And a lot of that interest is around what we call responsible investing or portfolios with purpose, where we're seeing real interest particularly in Europe, but also growing interest here in the U.S., and that crosses equities and fixed income. As Matt was alluding to, there's continuing appetite for private credit. So as we have new capabilities to launch, we see pretty receptive audiences for it. Moving into retail, in Asia, we're seeing a very important market for us. There's continuing concern about interest rates and rising interest rates and inflation there. So that has impacted us from the perspective of our American income and global high-yield products. On the other hand, frankly, given the extreme moves in treasury yields over the quarter and over the last sort of four or five months, I would say they’re actually rather muted relative to historical experiences that we’ve had. Conversely, we’re seeing quite a lot of demand for equities and multi-asset in Asia, notably in Japan. And so we’ve seen a much better mix at least for ourselves in the Asian marketplace in retail. In the United States, big demand from munis, muni SMAs have really been driving a lot of interest for us and equities continue to be pretty strong here, as you can see, and in Europe, slower from our perspective, but equities certainly there and fixed income to a lesser degree. And finally, private client had a very robust first quarter. And demand is really, I think, a function of people taking cash and investing as we had a significant cash build-up over the course of the year with our clients and putting it to work both in alternatives and elsewhere. So, I see continuing interest on more appetite than we’ve seen in a while.

Got it. Thanks very much.

Our next question comes from Kareem Afifi at Credit Suisse.

Good morning, everyone. This is Kareem filling in for Craig. My first question is on the private wealth channel. So there was a 23% sequential improvement in redemptions? Could you talk a little bit about what the drivers behind this improvement? And if we should expect decelerating redemption activity in this channel in the future? Thank you.

Hi, thanks for the question. It’s Kate Burke here. Yes, we did have a strong quarter with net flows of $1.7 billion. Look, I think that’s attributable to a number of factors over the course of the pandemic, and really the commitment of putting clients at the front and center of everything we do. Whether it’s through the investment offerings that we’ve added to the platform, and the thought leading wealth advice as well as the strength of the overall trusted advisor and service team, really putting the clients at the forefront, based on the wealth model and allocation advice. We did begin, as Seth just mentioned at the beginning of the year, encouraging clients to redeploy cash to a higher earning asset classes. The success of this campaign did move cash from the sidelines, with both federated cash and holding cash down about $300 million each. So, we continue – we do continue to see movement there. We’re also planning significant product launches in 2021 in alternatives, again, as well as around ESG and as Seth also mentioned the strength of the SMA platform to meet the evolving client preferences, again, while always focused on their outcomes. So, we can’t predict flows, but we’re pleased with the success we’ve seen so far this year, and are very focused on continuing to grow the business in the coming quarters.

Thank you.

I would just add – I guess I would just add to that, I think we also had improved investment performance, which helps private bank with respect to retention. And I think that’s continuing.

Thank you.

There are no further questions at this time. Mr. Griffin, I turn the call back over to you.

Okay, thank you, operator. Thank you, everyone for participating in our conference call today. Feel free to reach out to Investor Relations with any further questions. And have a great day. Thank you.