Equitable (EQH) Morgan Stanley US Financials, Payments & CRE Conference 2024 summary

Strategic progress and financial targets

• Cash generation targeted to grow 50% to $2 billion by 2027, supported by 12%-15% EPS CAGR and a payout ratio of 60%-70%.

• 2024 cash flow projected at $1.4-$1.5 billion, with payout ratio at the high end of the target range.

• EPS grew 18% in Q1 2024, exceeding targets due to normalized mortality and lower VII.

• Asset and wealth businesses now contribute 50% of cash flows, up from 17% at IPO, expected to remain at this level through 2027.

• Three drivers for future cash flow: organic growth in retirement, asset/wealth management, and runoff of legacy business.

Private markets and investment income

• Commitment to AllianceBernstein’s private credit business increased to $20 billion, with $9.6 billion already deployed.

• Private credit in the General Account to grow from 14% to 15%-20%, focusing on private placements, infrastructure, and residential loans.

• AllianceBernstein’s Private Markets AUM reached $63 billion, targeting $90-$100 billion by 2027, aiming for 20% of AB’s revenues.

• Over half of the $110 million incremental income target from private markets already achieved.

• Advocacy for appropriate capital requirements in private credit to ensure sustainability.

Alternative investments and portfolio management

• Alternatives represent 3% of the General Account, expected to decrease over time due to product mix shift.

• Q1 2024 alternatives returned 5.6% annualized, with similar returns expected in Q2, below the 8%-12% long-term target due to real estate equity drag.

• Portfolio expected to recover to near 8% in the second half of 2024, with normalization to target range anticipated in 2025 if markets stabilize.