Robin Raju: Sure. Yes. So, when we made the increase in 2016 the total value — the PV value of the increase at that time was $1.3 billion. Over the last few years, we’ve accrued what we expect to get back. And in total it’s been roughly $600 million of which $106 million was in the first quarter. We do not expect any further accruals related to this matter and we don’t see any impact to go-forward guidance.
Tom Gallagher: Okay. Thank you.
Operator: Your next question is from the line of Joel Hurwitz with Dowling & Partners. Please go ahead.
Joel Hurwitz: Hey, good morning. I wanted to follow-up on group. Despite some of the general account flow pressure that was discussed earlier, the net interest margin was up pretty significantly year-over-year and even quarter-over-quarter. I guess just any color on the sizable improvement in spreads there. And do you see that as sustainable moving forward?
Robin Raju: Sure. So, the group business for the quarter was $124 million of earnings, up 28% year-over-year. I have to say to Nick’s comments earlier, I mean we see great operating leverage in this business, strong growth in equity markets, and we’re retaining that those fees to the bottom line. So, we’re very pleased with overall earnings growth coming through in the group side. We’ve seen good improvement in net investment income as well. Remember a lot of the net investment income is allocated to the different segments, so they could fluctuate from quarter-to-quarter. But we do expect to continue to grow that through the capabilities of AllianceBernstein. In the quarter, as well the group business benefited from favorable tax. So, of the $124 million I mentioned net of some of the alts in the tax probably $115 million is a good number to think about for the Group Retirement business.
Joel Hurwitz: Okay, that’s helpful. And then another follow-up on the BlackRock product. Any way you can dimension the initial April flows? And then in terms of that business, what is the return profile of that business? And how does that compare to the other Group Retirement business that you have?
Robin Raju: Sure. We’re not going to get ahead of the flows. We’ll wait to the second quarter. But as Mark mentioned, we expect it to be accretive to the Group Retirement business going forward. In terms of returns perspective, I would think of it similar to other spread products in the marketplace. When we — you’re going to see meaningful flows relative to the Group Retirement business, but over the long-term is when we see the real potential of this in capturing the longer term retirement demand in the U.S. market and serving that client need that Mark highlighted on the call. So we’re really bullish about the opportunity. Don’t want to get ahead of it. Don’t see it impacting cash or earnings in the near-term. But you’ll start to see it come through in net flows.
Joel Hurwitz: Great. Thanks Robin.
Operator: Your next question is from the line of Wilma Burdis with Raymond James. Please go ahead.
Wilma Burdis: Hey. Good morning. Could you talk a little bit about the valuation and availability of potential Wealth Management scale deals? Thank you.
Robin Raju: Yeah. We’re — we always look at M&A opportunities in the U.S. market and International specifically on we’re focused on the Wealth side and Alternatives, as we look at deals, but valuations continue to be high in the market. And we don’t necessarily see it being accretive to shareholders relative to share buybacks at this time. That being said, we’re pretty active, and you see that in the numbers on headcount up year-over-year on experienced hires. That’s where we think it’s smart to deploy. We’re bringing on experienced hires that have good AUM leverage to them. So that’s where we’ll concentrate in the near-term. And remember, just I — just want to keep in mind, when we get asked questions about M&A like, with the growth that we see coming through in the Individual business, the Group business through BlackRock and the Alts business of AllianceBernstein, M&A isn’t something that we need in order to deliver our targets.
Our organic growth plan has performed tremendously and M&A will continue to be an option, but it’s just an option because we’re getting such good growth. That’s where we’ll prioritize our time.
Wilma Burdis: Thank you. Can you just provide a little bit more color on the outlook for Alternative investment returns in 2Q, and then, the expectation for them to normalize a little bit later in 2024? Thank you.
Robin Raju: Sure. So Alts returned 5.8% on an annualized basis in the first quarter. We expect similar returns in the second quarter. The caveat being real estate equity, that’s been under some pressure due to rates increasing. For the full year, we still expect to be slightly below our 8% to 12% as long as equity markets maintain at these levels, as the growth funds will continue to outperform relative to the real estate equity. So we’re quite comfortable with the asset class over the long-term. It’s returned 10% on an annualized basis. So it’s in the 8% to 12% long-term guidance that we’ve given.
Wilma Burdis: Okay. Thank you.
Operator: Your next question is from the line of Bob Huang with Morgan Stanley. Please go ahead.
Bob Huang: Hey. Good morning. So maybe my first question is on Group Retirement. The result was probably the strongest since first quarter 2022. Obviously that’s driven by NII, higher fee income and things of that nature. Just given the broader flow picture, broader macro environment, how durable do you think that earnings power is? And how should we think about just the earnings trajectory longer term going forward for that space?
Robin Raju: Look, as I mentioned earlier the flows that Nick, we’re seeing good growth in terms of first year premium we saw slightly higher surrenders, but we’re retaining almost 50% of it through Equitable advisers. The growth in earnings is sustainable. We’ve seen it across time. As I mentioned, we have good operating leverage in that business. We’re up 28% year-over-year. And if equity markets continue and we continue to invest in higher yields and deliver good risk-adjusted returns we’ll continue to see growth in earnings. And then on top of that over time as the BlackRock LifePath product becomes more material there’s upside there as well.
Bob Huang: Great. Thank you. My follow-up is on DOL rule. I know that you talked about earlier that you’re already under — operate under Reg BI standards. But curious if the fiduciary rules would have an impact on sales for proprietary AllianceBernstein products that are sold on the Equitable distribution channel or are there any impact between the AllianceBernstein side of things as well?
Nick Lane: Onur, can jump in there, but the answer is no.
Bob Huang: Okay. No. Thank you.
Onur Erzan: Yeah. Thank you, Nick. Onur. Just to validate based on our initial assessment, we don’t see any material change in the business trajectory based on the DOL ruling tomorrow versus yesterday.
Bob Huang: Excellent. Thanks.
Operator: Your next question is from the line of Mark Hughes with Truist Securities. Please go ahead.
