Divestitures

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

Divestitures

On November 22, 2022, AB and SocGen, a leading European bank, announced plans to form a joint venture combining their respective cash equities and research businesses. The consummation of the joint venture is subject to customary closing conditions, including regulatory clearances. The closing is expected to occur before the end of 2023. Upon closing, AB will own a 49% interest in the joint venture and SocGen will own a 51% interest, with an option to reach 100% ownership after five years. The assets and liabilities of AB's research services business (“the disposal group”) have been classified as held for sale on the condensed consolidated statement of financial condition and recorded at fair value, less cost to sell. As a result of classifying these assets as held for sale, we recognized a non-cash valuation adjustment of $2.5 million and $7.4 million on the condensed consolidated statement of income for the three months ended March 31, 2023 and December 31, 2022, respectively, to recognize the net carrying value at lower of cost or fair value, less estimated costs to sell.

The following table summarizes the assets and liabilities of the disposal group classified as held for sale on the condensed consolidated statement of financial condition as of March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022
Cash and cash equivalents	$	154,484	$	159,123
Receivables, net:
Brokers and dealers	64,547		44,717
Brokerage clients	29,709		29,243
Other fees	22,245		22,988
Investments	15,988		24,507
Furniture and equipment, net	4,008		4,128
Other assets	223,933		107,764
Right-of-use assets	1,537		1,552
Intangible assets	4,692		4,903
Goodwill	159,826		159,826
Valuation adjustment (allowance) on disposal group	(9,900)		(7,400)
Total assets held for sale	$	671,069	$	551,351
Payables:
Brokers and dealers	$	43,001	$	32,983
Brokerage clients	31,529		10,232
Other liabilities	66,407		50,884
Accrued compensation and benefits	16,824		13,853
Total liabilities held for sale	$	157,761	$	107,952

As of March 31, 2023 and December 31, 2022, cash and cash equivalents classified as held for sale included in the condensed consolidated statement of cash flows was $154.5 million and $159.1 million, respectively.

We have determined that the exit from the sell-side research business does not represent a strategic shift that has had, or is likely to have a major effect on our consolidated results of operations. Accordingly, we have not classified the disposal group as discontinued operations. The results of operations of the disposal group up to the respective dates of sale will be included in our consolidated results of operations for all periods presented. The lower of amortized cost or fair value adjustment upon transferring these assets to held for sale was not material.