Thank you for standing by, and welcome to the AllianceBernstein First Quarter 2026 Earnings Review. As a reminder, this conference is being recorded and will be available for replay on our website shortly after the conclusion of this call. I would now like to turn the conference over to the host for this call, Head of Investor Relations for AB, Mr. Ioanis Jorgali. Please go ahead.

Good morning, everyone, and welcome to our first quarter 2026 earnings review. Today's conference call is being webcast and is accompanied by a slide presentation available in the Investor Relations section of our website at www.alliancebernstein.com. Joining us to discuss the company's quarterly results are Seth Bernstein, our Chief Executive Officer; and Tom Simeone, our Chief Financial Officer. Onur Erzan, our President, will join us for the question-and-answer session following 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 would 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 10-Q, which we will file on Friday. 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 a reconciliation of GAAP to adjusted results are in our presentation appendix, press release and our 10-Q. 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. While the first quarter was marked by geopolitical tensions and elevated volatility, AB's results underscore the resilience of our platform and our diversified business mix. I want to start by highlighting the key themes that shaped this quarter listed on Slide 3. First, the proposed Equitable Corebridge merger will provide a step-function acceleration of our flywheel and meaningfully enhance AB's scale and growth outlook. The combined company will have over $350 billion of general account assets and generate $70 billion to $80 billion of new liabilities annually, positioning AB among the most strategically important players in the insurance asset management channel. Over time, we expect to manage at least $100 billion of general and separate account assets from Corebridge. We look forward to supporting our new partner in delivering better outcomes for their policyholders while we benefit from enhanced scale, improved earnings durability and increased capacity to invest for growth. We believe this announcement will further accelerate the momentum already evident across our insurance franchise. Today, we serve more than 90 third-party insurance clients with $58 billion of AUM, including $32 billion of general account assets. Deployments from recently announced strategic insurance partnerships are progressing ahead of schedule and are expanding beyond the initial mandates. We are well positioned to benefit as these partnerships continue to grow. Second, while we continue to drive inflows from secular growth engines like insurance, private markets and active ETFs, we had firm-wide active net outflows of approximately $6 billion in the first quarter, concentrated within a subset of active equity strategies. Active equity outflows of roughly $11 billion spanned across channels and reflect recent performance challenges as well as client allocation decisions. We also had taxable fixed income outflows of nearly $2 billion as positive institutional engagement was offset by retail redemptions concentrated in the Asia Pacific region. Turning to the positives. We generated over $3 billion of organic inflows in tax-exempt fixed income and alternatives multi-asset strategies, respectively. Our private market platform reached $85 billion in AUM, up 13% year-over-year, reflecting strong institutional momentum. At the same time, our SMA business stands at $63 billion, growing organically at 15% annualized rate in the first quarter. We continue to build on our technological edge and efficiency benefits for financial advisers, extending from a predominantly municipal-focused SMA offering to a broader multi-asset toolkit. We're seeing real traction in taxable fixed income SMAs highlighted by a recently funded $300 million mandate. AB has long been a market leader in tax-optimized fixed income SMAs, an area made increasingly scalable by recent advances in data science. Our active ETF lineup now encompasses 25 strategies with more than $16 billion in AUM, up over 150% year-over-year, with 8 of our ETFs surpassing $1 billion in AUM, including our 5-star rated disruptors ETF, ticker FWD. Our security of the future thematic portfolio has surpassed $4 billion in assets, nearly tripling from a year ago with $1.7 billion of inflows in the first quarter alone. While these offerings are currently smaller than some of our larger marquee services, they represent emerging durable growth engines that will reshape the composition of our AUM over time. Looking forward, our institutional channel is positioned for accelerating net flows in the second half of 2026, supported by the largest pipeline on record, surpassing $27 billion in AUM. Third, our distribution platform provides direct access to secularly growing channels, including ultra-high net worth, insurance asset management and defined contribution. Together, these account for more than 45% of firm-wide AUM and provide relative stability across market cycles. Bernstein Private Wealth ended the quarter with $155 billion in assets under management, and it contributes more than one-third of firm-wide revenues. Our insurance asset management business now manages approximately $120 billion of insurance general account assets across a growing roster of global partners. Our customized retirement business exceeds $100 billion in defined contribution assets, and we continue to innovate by incorporating a broader set of asset classes, including private markets and insurance solutions that provide guaranteed lifetime income. Overall, while this quarter's results reflect mixed dynamics and pressure from the challenging macro backdrop, we believe our broad product capabilities and differentiated distribution position AB well to generate organic growth over time. Slide 4 provides an overview of our financial results, and Tom will walk through these in greater detail later. Turning to Slide 5. I'll review our investment performance, starting with fixed income. Global bond markets posted modestly negative returns in the first quarter as heightened geopolitical tension, rising energy prices and shifting policy expectations pushed yields higher across most developed markets. Credit markets were mixed. Investment-grade and high-yield corporates posted modest declines overall with U.S. corporates outperforming Eurozone peers, while securitized assets proved resilient. The Bloomberg U.S. Aggregate Index was roughly flat, outperforming the global aggregate, which returned negative 1.1% in the quarter. Our American Income and Global High Yield products both underperformed their respective benchmarks in the first quarter. Yield curve positioning and allocation to emerging markets detracted from AIP's relative returns, while GHY was similarly affected by European high-yield exposure and EM corporates. Notwithstanding near-term headwinds, our fixed income platform continues to perform well over longer measurement periods. More than half of our assets outperformed over the 1-year period, while 80% outperformed over 3 years and 64% over 5 years. Turning to equities. U.S. equity markets were hurt in the first quarter of 2026 with the S&P 500 returning negative 4.3%. The quarter began constructively but reversed with the emergence of credit concerns, AI-related disintermediation risks and escalating geopolitical tensions. Despite some early signs of improvement in year-to-date relative performance, our track records remain pressured and below our expectations. 23% of assets under management outperformed over the 1 year, 24% over 3 years and 44% over 5 years. This primarily reflects the outsized impact of our larger U.S.-oriented growth strategies that have underperformed as quality growth derated in recent quarters. However, our equity platform is intentionally diversified across styles and geographies, avoiding overreliance on any single market regime. International and emerging market strategies with a smaller AUM base continue to perform well. In fact, we have more than 25 strategies with nearly $40 billion of AUM that are outperforming their respective benchmarks or composites over both the 3- and 5-year periods with 8 out of the 10 largest among them being international or global strategies. As market breadth began to improve entering 2026, a growing share of our growth, value, core and thematic strategies delivered stronger relative results. Looking ahead, we believe a more balanced earnings environment and continued economic stability could favor international and value-oriented strategies, while lower tracking error portfolios may provide clients with more consistent participation across shifting market leadership. Turning to Slide 6, I'll discuss our retail highlights. Retail gross sales rose sequentially and surpassed $23 billion for the first time in 4 quarters. However, the channel recorded net outflows of nearly $6 billion in the first quarter, reflecting elevated redemptions. Active equity and taxable fixed income each exceeded $4 billion in outflows, driven primarily by redemptions from select marquee U.S. services in Asia Pacific as relative value and capital flows have shifted toward neighboring and domestic markets. Passive equities and passive fixed income also posted outflows. These headwinds were partially offset by more than $3 billion of tax-exempt inflows and nearly $1 billion of alternatives and multi-asset inflows, continuing their durable organic growth trajectories. Our retail muni SMA platform has consecutively positive quarterly inflows for more than 3 years, a testament to the compounding strength of our market-leading capabilities. We are well positioned as the bond reallocation trend continues to unfold, particularly as we extend our success into tax-aware SMAs. Moving to Slide 7, I'll cover our institutional channel. Institutional gross sales also increased both sequentially and year-over-year. However, the channel had roughly $2 billion of net outflows, primarily driven by more than $5 billion in active equity outflows. Despite some short-term headwinds from insurance hedging activity, the channel recorded over $2 billion of inflows in taxable fixed income, reflecting broadly improved institutional appetite. Alternatives multi-asset also saw positive inflows for the fifth consecutive quarter, supported by deployments in private markets and fundings of defined contribution plans. Institutional engagement across private credit has persisted with nearly $1 billion of deployments on the back of improved terms and widening spreads. This includes direct lending, where ABPCI recently secured a $0.5 billion third-party institutional mandate reflected on our pipeline. Furthermore, our pipeline has reached a record high $27.5 billion in assets under management, supported by $9 billion in new commitments. This growth reflects expansion of our recently announced insurance partnerships to include additional mandates. It also includes an increase in Equitable's commercial mortgage loan commitments to $12 billion, up from the previously announced $10 billion. The pipeline fee rate declined slightly to 19 basis points, primarily due to the addition of sizable fixed income and passive equity mandates. Excluding roughly $5 billion in passive mandates included in the pipeline, the fee rate for active AUM stands at 23 basis points. Next on Slide 8, I'll cover Private Wealth. Quarterly gross sales continue to set new records at Bernstein Private Wealth with the channel registering its third consecutive quarter of organic growth. Inflows grew nearly 2% annualized, while net new client assets rose 5% annualized in the first quarter. Redemption requests for private credit products that offer periodic liquidity stayed well below our 2.5% quarterly cap. This is a testament to the combined strength of our highly specialized adviser sales force, coupled with ABPCI's strong investment track record built on a decade-long partnership since Bernstein was among the pioneers that distributed direct lending as an asset class. I'm particularly proud of the differentiated client service we offer in alternatives, reinforced by the seamless collaboration between our homegrown distribution and investment teams, a defining advantage for AllianceBernstein. Adviser headcount is tracking ahead of our 5% annual growth target. We believe our platform offers exceptional support and training that drives industry-leading adviser productivity, tracking both experienced and emerging talent. As we continue to invest in adviser headcount growth and productivity, including integrating Generative AI capabilities into daily adviser workflows, we anticipate continuous client experience improvement along with more targeted and effective prospecting. Adviser headcount remains a key area of focused investment and a critical lever for long-term growth within the channel. I will close with Slides 9 and 10, which highlight the momentum of our private markets platform and the opportunities from the Equitable Corebridge merger. In partnership with Equitable, we have scaled our private markets platform to $85 billion in fee-paying and fee-eligible AUM, anchored primarily in credit-oriented strategies, including direct lending, asset-based finance, commercial real estate debt and investment-grade and corporate structured private placements. Equitable's $20 billion permanent capital commitment now fully deployed and exceeding the original commitment has been a critical catalyst, accelerating our expansion in private markets while strengthening our ability to seed and scale higher fee strategies. Our collaboration continues to deepen and evolve, progressing across residential mortgage solutions, structured private placements and most recently, commercial mortgage loans. Each initiative builds incremental scale while broadening the applicability of our capabilities across third-party insurance and other institutional client channel. Our goal is to serve a diverse base of retail, institutional and insurance clients across a wide range of risk return objectives. The proposed Equitable Corebridge merger amplifies this flywheel. With a combined general account asset base exceeding $350 billion and a broader liability profile, the merged company will be one of the largest players in the industry, creating significant opportunities for AB. Importantly, the strategies developed for Equitable are not bespoke or stand-alone solutions. They form the commercial foundation from which we serve a growing universe of third-party insurance and institutional clients worldwide. Amplifying the flywheel with the inclusion of Corebridge is a defining moment in AB's evolution, not simply additive to our existing asset base, but potentially transformative in its impact on scale, earnings, durability and long-term strategic positioning. With a proven operating model, a powerful strategic partner and a focused growth strategy, we're well positioned to achieve our $90 billion to $100 billion private markets AUM target by 2027 and extend our growth trajectory beyond that milestone. With that, I will pass it on to Tom to discuss our financial results.

Thank you, Seth. Good morning, everyone, and thank you for joining our call. Adjusted earnings for the first quarter of 2026 were $0.83 per unit, representing a 4% increase year-over-year. Distributions grew uniformly with EPU as we distribute 100% of our adjusted earnings to unitholders. On Slide 11, we present our adjusted results, which exclude certain items not considered part of our core operating business. For a detailed reconciliation of GAAP and adjusted financials, please refer to our presentation appendix or our 10-Q. In the first quarter, net revenues reached $871 million, representing a 4% increase year-over-year. Base fees grew 5% year-over-year, reflecting 8% higher average AUM, partially offset by a lower firm-wide fee rate due to the mix shift. Performance fees totaled approximately $23 million, down $16 million year-over-year, reflecting lower realizations from private market strategies. Our full year private markets performance fee outlook remains unchanged at $70 million to $80 million. Importantly, we are increasing our full year combined performance fee outlook to $95 million to $115 million, reflecting stronger-than-expected contributions from public market strategies. I will cover this in more detail shortly. Dividend and interest revenue, along with broker-dealer-related interest expense declined year-over-year, reflecting lower cash and margin balances within private wealth. Investment losses totaled $5 million, largely attributable to hedging costs associated with seed-like investments. Other revenues totaled $20 million, up $6 million versus prior year's quarter, driven primarily by higher shareholder servicing fees and mutual fund reimbursements. Turning to expenses. First quarter total operating expenses were $580 million, up 4% year-over-year, driven by a 4% increase in compensation expense and a 5% increase in noncompensation expenses. Total compensation and benefits rose 4% year-over-year with a compensation ratio of 48.5% of adjusted net revenues, consistent with last year's accrual rate. We expect to continue accruing at 40.5% compensation to net revenue ratio in the second quarter while remaining mindful of market volatility and potential adjustments in the second half of the year as conditions evolve. Promotion and servicing expenses increased by $1 million, while G&A expenses increased by $6 million or 5% year-over-year, reflecting normalization from relatively depressed levels in the first quarter of last year. For full year 2026, we continue to expect non-compensation expenses to range between $625 million and $650 million. This outlook reflects normalization in promotion and G&A expenses, along with discretionary investments in technology and the operational build-out for new strategies. Promotion and servicing expenses are expected to represent 20% to 30% of non-compensation expense, while G&A comprising the remaining 70% to 80%. We are making steady progress integrating the new commercial mortgage loans platform. Importantly, Equitable has increased its long-duration general account mandate to $12 billion from $10 billion with onboarding in the second half of the year and the assets producing a high single-digit fee rate. Interest expense on borrowings was flat compared with the prior year. ABLP's effective tax rate was 5.6% in the first quarter of 2026, which reflects a favorable mix of earnings. We continue to forecast ABLP's effective tax rate in 2026 to be between 6% and 7%. Our operating income of $291 million is up 3% versus the prior year, slightly below the growth in revenues and operating expenses. Our adjusted operating margin was 33.4% in the first quarter, down 30 basis points year-over-year due to investments in the business. These investments include technology initiatives, the onboarding of new investment teams and increasing financial adviser headcount. Importantly, margins remain at the high end of our Investor Day target range of 30% to 35%, which we had expected to achieve by 2027. As markets normalize, we expect improved operating leverage to support stronger flow-through from existing services, reinforcing our ability to balance reinvestment with profitability. In the first quarter, our firm-wide fee rate was 38.1 basis points, reflecting a negative mix shift in AUM. As we've noted previously, the fee rate remains highly mix dependent and several factors weighed on the rate relative to the prior year. In retail active equities, average AUM declined to 18.7% of firm-wide AUM from 20% a year ago as market appreciation was largely offset by outflows. In fixed income, elevated rates and FX volatility pressured taxable fixed income AUM with outflows concentrated in higher fee strategies such as American Income and Global High Yield, while inflows were primarily driven by lower fee municipal SMAs. Finally, turning to Slide 12 and our outlook. We now expect total performance fees for fiscal year 2026 of $95 million to $115 million, up from our prior range of $80 million to $100 million with additional potential upside dependent on market conditions. This reflects an increase in our public markets performance fee outlook to $25 million to $35 million, driven by first quarter realizations from our alpha-generating international small-cap strategy. Our private markets performance fee outlook remains unchanged at $70 million to $80 million despite a light first quarter driven by prudent proactive markdowns concentrated in software and tech services exposures. Note that these markdowns were not driven by credit events. And even if realized, they would be within our assumed annual loss framework. As a long-term buy-and-hold investor, ABPCI fully expects to realize value recovery across all creditworthy borrowers over time. It is important to note that the rate outlook and wider spread environment is supportive of forward-looking returns. All other guided items remain unchanged from last quarter. Looking ahead, we are encouraged by our institutional outlook, supported by a record pipeline of $27.5 billion, including public market mandates expected to fund next quarter and private markets mandates expected to fund by year-end, most notably the increased $12 billion commercial mortgage loan mandate from Equitable. We expect continued inflows across secular growth areas, including private wealth, SMAs, ETFs and private alternatives. Taken together, we have meaningfully strengthened our business mix and positioned the firm for the future by leaning into areas of structural growth while addressing areas of pressure with discipline. We look ahead with optimism, confident in what we believe to be a position of strength. With that, operator, please open the line for questions.

We'll take our first question from Craig Siegenthaler at Bank of America.

My question is on the Equitable Corebridge merger and your expectation to manage $100 billion of incremental AUM over time. So in terms of general account assets for the NewCo, what percent of total GA assets do you assume you're going to manage? And is the current GA level at Equitable in the $70 billion range now, plus I think there's $17 billion on the side of private market initiatives still. I just want to kind of refresher on all the numbers.

Craig, let me take that question. Obviously, the Corebridge Equitable merger is a very exciting development for us. As it was announced at the March 26 call, we expect at least $100 billion over time from both GA and separate account assets. Obviously, it's very early days since that announcement, and that deal is most likely going to take another nine months or so to close, roughly by year-end or fourth quarter. And hence, it will take us time to really do the bottom-up buildup of that $100 billion between GA and separate accounts. And in terms of funding of the assets, given the deal will likely close end of '26, it's going to be more '27 and beyond in terms of the new AUM coming to AB. So on one hand, we are super excited. On the other hand, we recognize it's going to take a few quarters to materialize those opportunities given the deal timeline. In terms of the GA buildup, we're not dependent on only Equitable or Corebridge. As you have seen in our slides, our GA assets from third-party clients grew by 28%. If you look at our pipeline, we had significant momentum in the pipeline. So for instance, we added a $3.5 billion CLO opportunity to our pipeline as an example. And we have a lot of other pipeline opportunities, which makes up 8% of our pipeline fees coming primarily from insurance clients. So overall, we are very excited about the trajectory in GA, both for proprietary as well as third-party clients.

Just as a follow-up, as you look at that $100 billion, what is the expected mix of public corporate or government debt that has CUSIPs versus private assets that are originated by your proprietary private markets businesses?

Again, we don't have an exact bottom-up buildup yet that is in works. Our estimate is, given this includes the separate account business, which tends to be more publics. And given some of the assets from the GA will be coming from the fixed income book, I think it's going to skew heavily towards the publics versus private in terms of day-one opportunity, if you will. But over time, if you think about this balance sheet, it's going to be one of the largest U.S. retirement companies and it will originate annuities across RILAs, fixed annuities, variable annuities, et cetera. That means your general account assets will grow materially. And a portion of that new flow will make its way to private, and we're going to be a strong beneficiary of that growth. So you shouldn't only look at it in terms of what is mappable on day one. You should look at it as what is the expectation on a go-forward basis given the new Equitable will be double the size of the origination and the assets at the minimum.

And congrats on the $100 billion of future wins.

Thank you.

We'll move next to Alex Blostein at Goldman Sachs.

I was hoping you guys could expand on what you're seeing in the institutional private credit market. Obviously, lots of volatility on the retail side. You guys don't have a ton of exposure there. But as you think about both opportunities and risks that are in the market today, how are you approaching that channel?

Thanks, Alex. We continue to see strong momentum in our institutional business for private credits. To underline your comment, yes, you're right. We don't have a significant exposure on the retail side, but we're also very pleased with what we have seen on the retail and private wealth side of private credits. If you look at our BDC, our redemption rate has been less than 2%. So that's much lower than what we have seen from some of the competitors. That speaks to the strength of our integrated asset and wealth management franchise. Proximity to the client helps us maintain lower redemption rates in these retail vehicles, partly in our private wealth channel. If you look at our private alts cap raise in private wealth, actually, it grew from 2025. Our first quarter fund raise in 2026 versus 2025 for private wealth was more than 30% higher. So definitely, we also continue to see momentum across private equity and private credit in our private wealth business, which admittedly skews more high net worth and ultra-high net worth. And on the institutional side, to get to your core question, we continue to add significant mandates to our pipeline. As Seth also mentioned in his opening remarks, we are seeing more accelerated and expanded benefits from some of the strategic partnerships we announced around the third-party insurance, and that remains the largest driver of our new pipeline. It's broad-based. It includes both asset-backed ABF-type of mandate as well as fund financing like NAV finance and real estate debt. And furthermore, we had several new mandates outside the insurance in core institution as well. So net-net, broad-based momentum skews heavier towards insurance, but seeing strength in non-insurance institutional as well. The implication is we're going to be comfortably hitting and exceeding our private markets AUM goal of $90 billion to $100 billion.

Great. And a follow-up for me. I was hoping to touch on the fee rate dynamics, both in the quarter, but really more importantly, looking further out. A couple of dynamics at play. Obviously, you mentioned that the active equity performance has been challenged, and we've seen that show up in retail flows, which are obviously higher fee rate, a bit mixed on the retail fixed income for now as well, but some wins on the institutional side of things, you mentioned private credit. So when you put it together, how does the evolution of the fee rate likely to look over the next couple of quarters?

Alex, it's Tom. We generally don't provide fee rate guidance, but we do prioritize sustainable organic growth and long-term profitability over focusing solely on the fee rate. Looking forward, we expect the fee rate trajectory to continue to reflect the mix of organic growth and market movements, which have been supportive in early second quarter.

Next, we'll move to Bill Katz at TD Cowen.

Just coming back to the expense outlook for a moment. It was in fact how do you interpret the slide with the initial take this morning. So you're keeping your expense non-op growth relatively stable. If I look at the first quarter, I think you're running well below the low end of the guide. How do we think about maybe the pacing to the spend as the year unfolds? And what kind of flexibility do you have if the markets remain volatile?

There's some seasonality in there. This happens from time to time. I would continue to stick with our guide at $625 million to $650 million. And then maybe just divide it up less what we have in there for first quarter so far. And as far as some flex, you may recall last year, we did have a lot of flex. We actually flexed down quite a bit because our business decelerated due to all the market volatility. So we do have flexibility that we can pull on this year if needed, but we did want to let the advisers get in front of some clients and attend some firm meetings that were withheld last year.

Okay. That's helpful. This is a follow-up. Maybe stepping back, talk about wealth management as a very durable asset for you. There are a lot of cross-currents in the industry at large. I wonder if you could talk a little bit about that. I appreciate you're at the upper end of the market, so things may not be quite as intense as for some of the key players you're compared against. That being said, could you discuss the competition for financial advisers and what the market dynamics have been in terms of industry churn? Also, there's a lot of anxiety around Agentic AI. Could you go a layer deeper and talk about where you're leveraging it and where some of the prospective risks might be?

Let me break that into two questions. One, talent market dynamics, how are you feeling about that? And second, the impact and usage of Agentic AI. On the talent side, we feel pretty good. We are well insulated from the high churn that some of our competitors are facing. Ultimately, our retention rate for our senior advisers, which drive a majority of our flows and the ones that helped us achieve the record productivity this quarter, have remained loyal. Our attrition rate remains very low, typically low single digits. And if you look at our recruiting, as you have seen, we added roughly 14 advisers, and that means our adviser headcount is up roughly by 5% in the first quarter. So we remain on track in terms of our ability to add talent. We will continue to pay competitively for talent and make our platform a preferred platform for existing and new talent based on our investment expertise, the tools that we provide like tax management as well as investments in technology. In terms of Agentic AI, given we are more on the high net worth plus side of things, we tend to deal with more complex client situations. Our highest growth part of our business, our ultra-high net worth business grows at four times as fast as the rest of the business. So that creates some moats in terms of technology disruption because we deal with a lot of complex tax issues and complex global family issues. Some of the value-add is also in value-added services, not the standard asset allocation and basic tax mitigation strategies. In terms of how we are taking advantage of AI, it's in several areas. We are using it for client meeting preparation, leveraging our CRM system to be better prepared for client engagements and to drive more growth from those conversations and increase share of wallet. We are using it to create efficiencies in how we manage our business, particularly on client servicing. If you look at our client service associates onshore, that headcount has been relatively flat, although we have been adding advisers and growing organically. Some of those servicing efficiencies are driven by technology and client servicing. One example is how we deal with RFPs; we use technology and AI heavily there. And finally, in client acquisition, we are using more advanced lead generation technologies and AI-driven marketing to drive new growth. It cuts across servicing efficiencies, effectiveness in client conversations and new client acquisition. That said, it's still early innings. We see benefits but it has not yet translated into a concrete financial impact, but we expect that over time.

We'll move next to John Dunn at Evercore ISI.

Maybe just staying on private wealth for a second. I know there's seasonality in the second quarter and then you mentioned private wealth demand. But could you remind us about maybe seasonality for the rest of the year, maybe shifting product demand and then the temperature of the channel's appetite to put money to work?

Seasonality is something to be mindful of. April is a tax month, so we tend to have a soft April in general in terms of flows because a lot of our clients pay taxes. Even with heightened macro risks—war in the Middle East, oil prices, and other factors—our high net worth and ultra-high net worth clients remain engaged. It has been relatively robust in terms of risk taking. We have not seen them go to the sidelines. As a result, we remain excited about the fundraising and growth. As you have seen in Q1, we had very high sales relative to the previous eight quarters. So we've definitely seen momentum in sales, and we are not seeing a major slowdown yet. Two words of caution: number one, if the Middle East situation worsens or the conflict extends, that can impact consumer sentiment and our clients will not be immune to that. Secondly, if M&A activity slows and liquidity events for entrepreneurs slow down, that can impact our business because exits and liquidity events feed into our flows. But at present, we are not seeing a major slowdown.

John, I would just add that the resilience in the private client group is echoed more broadly in the business. Given the volatility we've seen, it's notable markets are where they are, and we continue to see people exploring committing money to longer-term opportunities. There are potential drawdowns given the volatility in macro markets, but we're pleased with progress to date.

Got it. And then maybe could you just walk through some of the factors outside of investment performance that could get high-yield fixed income funds distributed in Asia back to being less of a headwind?

We are reopening our Global High Yield strategy in Taiwan. We've gotten regulatory approval, which is what stopped us previously. We're optimistic that we'll see incremental flows from there. We continue to see appetite for fixed income, but it's been more competitive and alternative local opportunities have been stronger. The dollar remains fairly strong, and I hope we'll see some recovery along with performance.

A couple of additional points: our ETF platform continues to build momentum. If you look at the monthly run rate domestically, we are getting close to $0.5 billion net flows per month, a healthy growth rate for our ETFs across asset classes, including fixed income. We are expanding momentum into international markets: we launched two fixed income ETFs in Taiwan and several UCITS ETFs in Europe this week. We will tap new markets outside our traditional intermediary channel using ETFs. It will take a few quarters to build momentum in those new products, but we are seeding the ground for future growth.

Next we'll go to Dan Fannon at Jefferies.

So one more just on the private wealth side and tracking above the 5% adviser growth target. And so I was curious if you could just give a little bit of a framework or profile of the adviser that's joining your platform? I know you generally aren't paying the same levels of transition assistance or other things, but curious about the profile? And then how you anticipate those to ramp as they integrate into your platform over time?

We typically have a bias towards new-to-industry internal promotions as well as mid-career switches, which has historically kept our cost of talent acquisition lower than some competitors. That said, we are open to adding experienced advisers, some of whom might have books. I would estimate about 75% of hires fit the traditional profile and roughly 25% are more experienced advisers, some with transferable assets. Given we added advisers early in the year, recruiting will be slower for the rest of the year, but we expect to end a couple of percentage points higher than where we exited this quarter on a net basis. About ramping: a new-to-industry adviser typically takes about four years to breakeven and then reaches peak productivity in five to ten years. We have initiatives and dedicated teams to accelerate ramp-up, shortening time to full productivity.

Great. And then just a follow-up on the pipeline. Obviously, record levels, and I think you gave some context around the funding of that. But could you talk more broadly about momentum as you think about the institutional channel and kind of sales activity and product mix in context of that outside of what is actually in the pipeline today?

If you think about our average deployment for the pipeline, we are currently running at about nine months. So the good news is the record pipeline will be deployed relatively quickly and produce fee-generating sales. In terms of new opportunities, the Corebridge Equitable $100 billion opportunity is sizable for 2027 and beyond. We also continue broadening the third-party insurance franchise, adding new relationships and mandates on both the general account side with private credit and fixed income and on the separate account side with equities and multi-assets. We are seeing momentum in Asia Pacific too, where quantitatively oriented strategies have good demand. Expect more opportunities across our systematic platform globally, particularly in Asia where systematic equity strategies are in demand.

And next, we'll move to Benjamin Budish at Barclays.

This is Mason on for Ben. I just wanted to ask more about your ETF business. Can you talk more about the current distribution footprint outside of your wealth platform? And if possible, can you share any color about the current economic arrangements with distributors? And how they may be changing at all?

In terms of our ETF franchise, it cuts across our proprietary wealth channel as well as third-party distribution. The third-party side is growing faster from a smaller base. We launched the ETF business starting in 2022, initially leaning into our private wealth channel and then scaling into third-party domestically and overseas. On the third-party side, we are onboarding ETFs to multiple new platforms, including wirehouses, regional broker-dealers and independents. We have a very small, almost immaterial direct distribution footprint through fund supermarkets, so our dependence on those platforms is much lower than some other ETF providers that have large passive franchises. As a result, our third-party distribution cost is not materially impacted by what's happening with those platforms.

And we'll take a follow-up question from Bill Katz at TD Cowen.

Just coming back to performance fees, thank you for the updated guidance. Can we unpack the incremental pickup in the public side? How much of that is just due to maybe market positioning versus anything going on the hedge fund side and anything related to maybe the shuttering of a relatively sizable hedge fund you announced? And then on the operating expense side, just coming back to that for a moment, it looks like it's up about 6% on the midpoint year-on-year. As we look out into 2027, would you anticipate any kind of deceleration of the core expense growth? Or would that likely stay the same just given the myriad of different growth vectors out there?

Generally, it would stay the same from an operating expense perspective; we haven't offered next year's information this early. There's nothing on the horizon I'm aware of to offer additional color on expenses. As far as the performance fees, the changes are not impacted by the closure of Arya that we announced recently. What's driving the public performance fees pickup is realizations from our international small- and mid-cap product in the first quarter versus last year.

And there are no further questions at this time. Mr. Jorgali, I'll turn the call back over to you.

Thank you very much, Audra, and thank you, everyone, for joining our call. I hope you have a great day, and please reach out if you have any questions.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.