What changed in this filing

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Item 1A. Risk Factors

2026-02-12 compared with 2025-02-14 · 43 added, 24 removed, 297 unchanged (18% of the section changed)

9 unchanged sentences

• Market Factors:

Our AUM remain sensitive to global financial market volatility, such as the inflationary pressures and interest rate increases in 2022 and 2023, followed by interest rate decreases and renewed inflationary concerns in 2024.

Continued global economic uncertainty may lead to market volatility, potentially reducing our revenues and net income.

3 unchanged sentences

While liquidity was stable in 2025, future deterioration could adversely affect our AUM, revenues, and net income.

2025 Annual Report 15

• Geographic and Geopolitical Factors:

Our clients and our AUM are geographically diverse as approximately 27% of our clients’ domicile is outside the US (primarily Europe, Asia, and the Americas) and approximately 38% of our AUM by Investment Services are non-US.

Our clients and our AUM are geographically diverse as approximately 25% of our clients are domiciled outside the US (primarily Europe, Asia, and the Americas) and approximately 37% of our AUM by Investment Services are non-US.

Local or regional events including political, social, or economic instability, wars (e.g., Ukraine and the Middle East), challenges to currently recognized international borders (such as those made by China toward Taiwan), terrorism, health crises (e.g., COVID-19), natural disasters, and other unforeseen events can significantly affect our clients’ demand for our services, local and regional financial markets, and our AUM, revenues, and net income.

17 unchanged sentences

Changes in interest rates, especially rapid and significant increases, can negatively impact investor interest in and the value of our fixed income and multi-asset investment portfolios.

2024 Annual Report 17

• The AI Trade:

A significant change in AI adoption rates in the global economy and investments in the companies that provide the AI infrastructure could have a meaningful impact on US equity market returns.

A decrease in the value or amount of our AUM, an adverse mix shift in our AUM, or a reduction in our fee levels would negatively impact our investment advisory fees and revenues.

15 unchanged sentences

The investment management agreements for U.S.

Funds must be reviewed and approved annually by the Funds’ boards of directors, most of whom are independent.

Funds must be reviewed and

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approved annually by the Funds’ boards of directors, most of whom are independent.

There is no guarantee that these boards will approve the agreements each year or that they won't impose unfavorable terms.

18 unchanged sentences

Creating new products, including those focused on specific industries, sectors, or criteria like ESG, requires continuous innovation, significant time, resources, and ongoing support.

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Introducing new products and services involves substantial risks and uncertainties, such as establishing appropriate operational controls, adapting to shifting client and market preferences, facing competition, and complying with regulatory requirements.

23 unchanged sentences

Furthermore, using derivatives introduces counterparty risk (the risk of credit-related losses if counterparties fail to perform), regulatory risk (e.g., short selling restrictions), and cash/synthetic basis risk (the risk that underlying positions do not move identically to related derivatives).

2025 Annual Report 17

We may engage in strategic transactions that could pose risks.

As part of our business strategy, we consider strategic transactions (such as our insurance sidecar transaction with Ruby Reinsurance Company), including acquisitions (e.g., CarVal Investors in 2022), dispositions, mergers, consolidations, and joint ventures (e.g., our partnership with SocGen).

As part of our business strategy, we consider strategic transactions (such as our insurance sidecar transactions with Ruby Reinsurance Company and Fortitude Carlyle Asia Reinsurance, Ltd), including acquisitions (e.g., CarVal Investors in 2022), dispositions, mergers, consolidations, and joint ventures (e.g., our partnership with SocGen).

These transactions may involve significant risks and challenges, including:

16 unchanged sentences

In such cases, we may need to fulfill these commitments, which could affect our liquidity and financial condition.

For unconsolidated affiliates, these risks may be heightened due to lack of control over those entities' operations.

We may not accurately value the securities we hold on behalf of our clients or our company investments.

2 unchanged sentences

If market quotations for a security are unavailable, the Valuation Committee determines its fair value.

2024 Annual Report 19

Extraordinary market volatility, liquidity constraints, or failure to consider all factors when determining fair value could lead to improper valuation of securities.

11 unchanged sentences

If we fail to maintain or improve our investment performance, client flows may suffer, making competition more challenging.

Increased competition could reduce the demand for our products and services, adversely affecting on our financial condition, results of operations and business prospects.

Increased competition could reduce the demand for our products and services, adversely affecting our financial condition, results of operations and business prospects.

For more information regarding competitive factors, see “Competition” in Item 1 .

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People-related Risks

4 unchanged sentences

For additional information regarding our compensation practices, see "Compensation Discussion and Analysis" in Item 11.

Our process of relocating our headquarters may not be executed as we have envisioned.

The relocation of our headquarters may present issues that were not initially envisioned.

We have relocated many positions from the New York metropolitan area to our new corporate headquarters in Nashville, Tennessee ( see “Relocation Strategy” in Item 7 for more details).

12 unchanged sentences

Additionally, rapid technological advancements may allow competitors to implement more advanced platforms, putting us at a competitive disadvantage and negatively impacting our operations and business prospects.

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We also risk losses if we fail to protect sensitive and confidential information.

2 unchanged sentences

Such breaches could expose our proprietary information to competitors, require significant resources to address, harm our reputation, and result in liability under data protection laws, increasing costs or reducing revenues.

We have recently transitioned to a new third-party financial accounting system.

At the start of the current fiscal year, we migrated our core financial accounting systems and corporate books and records to a third-party platform, resulting in significant changes to our operational processes and financial reporting workflows.

Every component of this transition was carefully managed and a diligent testing plan was executed in preparation for this migration, but any project of this size exposes us to several risks, including increased reliance on the third-party service provider for the availability, security, and integrity of our financial data.

Any service interruptions, cybersecurity incidents, or failures by the vendor to meet contractual obligations could impair our ability to process transactions or prepare accurate and timely financial statements.

Additionally, the implementation of new internal controls over financial reporting may result in material weaknesses or significant deficiencies if not properly designed or executed.

Furthermore, if the new system does not adequately support our regulatory record-keeping obligations, we could face regulatory scrutiny or enforcement actions.

2025 Annual Report 19

We are undergoing a multi-year transition to replace our core investment management technology systems, which subjects us to significant operational, financial, and strategic risks.

We have commenced a multi-year, phased initiative to replace our existing investment management technology suite with a new set of integrated systems that we expect to improve our ability to manage client assets while reducing our operating expenses.

This transition is complex and involves significant risks, including potential operational disruptions, data integrity and security issues.

Material failures in the implementation process could impair our ability to manage client assets, execute trades, or fulfill regulatory reporting obligations.

In addition, the migration process increases the risk of data loss, corruption, or compromise of sensitive information could result in regulatory fines, legal claims, and reputational harm.

While we have implemented project management protocols, data validation and security measures, and vendor oversight procedures, there can be no assurance that these controls will be effective or that the new systems will deliver the anticipated efficiencies or cost savings.

Any of these factors, alone or in combination, could have a material adverse effect on our business.

Our increasing integration of artificial intelligence ("AI") and machine learning into our investment processes and business operations subject us to potential legal, financial and reputational risks.

We are increasingly integrating artificial intelligence (AI) and machine learning tools into our investment research, portfolio management, back-office operations, client services and corporate functions.

The use of these technologies introduces the potential for certain new risks, including lack of transparency in AI-driven outputs, potential data inaccuracies, model hallucinations and increased exposure to cybersecurity threats.

While the firm has made significant investment in the oversight and management of the firm's employees' use of AI, we may not prevent all improper uses of AI by our staff.

If employees of the firm use these tools in ways that are inconsistent with firm policy and training or we are unable to identify flawed or biased outputs, we could face regulatory scrutiny, legal claims, or reputational harm.

Additionally, the regulatory environment for AI is rapidly evolving, and a material failure to comply with new laws or SEC rules could result in fines or enforcement actions.

Any significant security breach of our information and cyber security infrastructure, as well as our failure to properly escalate and respond to such an incident, may significantly harm our operations and reputation.

Ensuring the continuity and effectiveness of our information and cyber security infrastructure, policies, procedures, and capabilities is crucial to protect our systems and data.

Although we have a robust cybersecurity infrastructure and incident preparedness strategy that we test frequently, we may not always be able to prevent or properly respond to a cyber incident.

Despite our protective measures, including advanced security technology, our systems may still be vulnerable to unauthorized access, supply chain attacks, computer viruses, and other security threats, such as cybercriminal attacks (e.g., phishing and ransomware).

These threats could significantly harm our operations, our ability to service our clients and our reputation.

We also take precautions to password-protect and encrypt our laptops and other mobile devices.

However, if these devices are stolen, misplaced, or left unattended, they could be hacked or used without authorization, posing a security risk and potentially leading to costly consequences.

Although we have a robust cybersecurity infrastructure and incident preparedness strategy that we test frequently, we may not always respond quickly enough to a cyber incident.

Any delay in response could damage our reputation, lead to litigation and regulatory scrutiny, and incur significant remediation costs.

These threats could significantly harm our operations, reduce our ability to service our clients and could damage our reputation.

The impacts of which could lead to litigation, regulatory scrutiny, and cause us to incur significant remediation costs.

For more details see "Cybersecurity" in Item 1C .

13 unchanged sentences

Our property and business interruption insurance may not cover all potential losses.

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Our own operational failures or those of third parties on which we rely, including failures arising out of human error, could disrupt our business, damage our reputation and reduce our revenues.

9 unchanged sentences

During market stress, default rates, credit downgrades, and collateral valuation disputes can increase significantly.

2024 Annual Report 21

Financial market disruptions and economic challenges may cause our counterparties and vendors to face cash flow problems or insolvency, leading to significant costs and impairing our business operations.

11 unchanged sentences

Our financial condition depends on cash flow from operations, which is influenced by capital market performance, our ability to maintain and grow AUM, and other factors beyond our control.

Adverse market conditions, profitability, perceived creditworthiness, and changes in government regulations, including tax and interest rates, may limit our ability to issue debt on reasonable terms.

Adverse market conditions, profitability, perceived creditworthiness, and changes in government regulations, including tax and interest rates, may limit our ability to issue debt or borrow on reasonable terms.

Our access to credit also depends on our firm's credit ratings.

15 unchanged sentences

Additionally, if our affiliates exclude us from joint insurance arrangements, we may need to secure stand-alone coverage with potentially less favorable terms and higher costs.

2025 Annual Report 21

Legal and Regulatory-related Risks

9 unchanged sentences

Privacy regulations such as the General Data Protection Regulation ( "GDPR" ) in Europe have strengthened privacy rules for organizations handling personal data, granting individuals more rights and control over the use of their personal data, and greatly increasing penalties for noncompliance.

In many other jurisdictions in which our subsidiaries operate, there is ongoing change to update and strengthen privacy regulations in a manner similar to GDPR, such as the California Consumer Privacy Act and California Privacy Rights Act, and India’s Digital Personal Data Protection Act.

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In many other jurisdictions in which our subsidiaries operate, there is ongoing change to update and strengthen privacy regulations in a manner similar to GDPR.

The European Commission's (the " EU ") action plan and the EU Sustainable Finance Disclosure Regulation also impose increased restrictions, disclosure obligations, and compliance costs, with potential reputational risks.

In Taiwan, the Financial Supervisory Commission implemented limits on local ownership of offshore investment products in 2015.

While we have had exemptions, losing them could force local investors to redeem their investments in our funds, significantly reducing our advisory fees and revenues.

Our fund management company (“ FMC ”) operations in China are subject to a number of regulatory risks, created by an opaque political system, evolving regulatory environment and complex data security and data transfer regulations.

23 unchanged sentences

A new line of business is defined as one not closely related to AB’s historical activities, and it becomes substantial if it generates more than 15% of the partnership's gross income or uses more than 15% of its assets (by value).

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Additionally, AB Units must not be considered publicly traded to maintain AB’s status as a private partnership for tax purposes.

5 unchanged sentences

could have a material impact on us.

Legislative proposals, if enacted, could materially affect us, but their outcomes are unpredictable.

Legislative proposals, if enacted when proposed, could materially affect us, but their outcomes are unpredictable.

AB management is monitoring potential impacts of new legislation.

2 unchanged sentences

Increased operations abroad or changes in foreign tax laws or rates could raise AB's effective tax rate.

2024 Annual Report 23

If any audit by the Internal Revenue Service ("IRS") of our income tax returns for any of our taxable years beginning after December 31, 2017 results in any adjustments, the IRS may collect any resulting taxes, including any applicable penalties and interest, directly from us, in which case our net income and the cash available for quarterly Unitholder distributions may be substantially reduced.

30 unchanged sentences

As a PTP, AB Holding may be liable for any under-withholding by a broker relying on a qualified notice if we fail to make a reasonable estimate of the amounts required for the 10% exception.

2025 Annual Report 23

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors