Neuberger Berman Sees Global Opportunities Amid Market Volatility
July 22, 2013
Alexander Samuelson, 212.476.5392, Alexander.Samuelson@nb.com
Anji Stewart, +44 (0)20 3214 9013, Anji.Stewart@nb.com
NEW YORK, July 22, 2013 – Portfolio managers and strategists at Neuberger Berman, one of the world's leading employee-controlled money managers, anticipate continued capital markets volatility through the second half of 2013 and into 2014 as a result of investor interpretation of the Federal Reserve's easing strategies, concerns about economic growth prospects worldwide, and mixed signals in company fundamentals.
The challenge for individual and institutional investors globally is managing the risk/return balance against a dynamic investment environment.
"As we approach 75 years in the investment management business, we are keenly aware of those challenges and take great pride in our ability to apply relevant lessons learned over multiple market cycles with modern and relevant solutions that meet client needs," said George Walker, chairman and CEO of Neuberger Berman. "This past year, we've provided value to clients with expanded investment strategies as global markets present opportunities. We've brought in talented professionals and moved into new regions. We also further increased employee ownership, aligning our firm with clients."
"The unprecedented involvement in the capital markets by central bankers has created a unique set of challenges to both managing risk and seeking opportunity. Our portfolio managers, we believe, are suited to take advantage of the volatility emanating from this environment," said Joseph Amato, president and chief investment officer of Neuberger Berman.
To meet evolving investor needs for global exposure, income generation, lower volatility and absolute return, Neuberger Berman continues to develop its actively managed platform of global investment strategies ranging across equities, fixed income, and alternatives, all managed by high conviction and highly experienced investment professionals. Over the past 12 months through June 2013, Neuberger Berman has introduced new strategies and significantly expanded its reach globally to serve individual and institutional investors with enhanced solutions, while continuing to seek superior long-term performance for clients.
Highlights of the past 12 months ended June 30, 2013 include:
- Continued strong active management on behalf of clients, with 88% of equity and fixed income AUM outperforming their passive benchmarks over the 10 years ending June 301.
- Launched Emerging Markets Debt (EMD) platform to provide institutional and individual investors with global and regional emerging markets debt strategies. Twenty-two EMD professionals, led by veteran managers Rob Drijkoningen and Gorky Urquieta, joined the firm in 2013.
- Raised $1.1 billion from investors worldwide for NB Strategic Co-Investment Partners Fund II LP, Neuberger Berman's second global private equity co-investment fund.
- Dyal Capital Partners, a $1.28 billion private equity fund, completed eight transactions of minority purchases in the management companies of established hedge fund firms.
- Officially opened our office in Taiwan, introducing high yield bond, U.S. REIT and U.S. small cap strategies to institutional and retail investors in Taiwan
In the 12 months through June 30, 2013, U.S. mutual fund assets increased 25% to $37.7 billion. Assets in the firm's Dublin-based funds available to non-U.S. investors increased 67% to $12.2 billion in the 12 months through June 30. As of June 30, 2013, $50.1 billion was managed for investors outside the United States, 23% of total AUM, compared with $41.2 billion, or 21% of the total on June 30, 2012. The firm also gained a total of $10.5 billion of new institutional business from 192 clients across 39 strategies for the 12 months through June 2013.
Looking ahead in 2013 and into 2014, Neuberger Berman managers and strategists see select investment opportunities globally within equities and fixed income. Among their views:
- Large-Cap U.S. Equities: Attractive valuations on an absolute and relative basis, with an anticipation of acceleration this year. Valuations today still look attractive relative to other markets around the world.
- Small-Cap U.S. Equities: Continued positive outlook in anticipation of a pick-up in M&A activity, which is typically a supportive driver of small caps. The asset class remains well positioned within the context of an improving domestic backdrop and offers good exposure to the ongoing manufacturing renaissance.
- European Equities: Economic data may be bottoming while equity risk premiums are at more attractive levels compared with places like the United States. European companies are overcoming the labor costs that have burdened them and investors appear to have moved beyond the persistent sovereign debt fears of the past three years. Focus shifts more to growth than sovereign risk.
- Emerging Market Equities: Caution remains appropriate, with a focus on individual company fundamentals. Longer-term potential for emerging market equities remains intact.
- High Yield Spreads: The rise in high yield credit spreads is largely due to technical factors, including mutual fund outflows. Spreads should narrow with expected continued low defaults. Bank loans, attractive given their floating-rate structure, could provide an additional buffer should there be a more prolonged and pronounced rising interest rate environment.
- Global Fixed Income Opportunities: With the recent declines, our global fixed income team is finding opportunities in local currency emerging market debt, high yield bonds and agency mortgages.
"Ours is a unique and stable investment culture, with more than 40 distinct and highly experienced portfolio teams focused on seeking superior long-term investment performance for clients," said Joe Amato. "While we are proud that clients continue to entrust us with more of their money, we will always measure our success in client satisfaction rather than assets under management."
About Neuberger Berman
Neuberger Berman is a private, independent, employee-controlled investment manager. It partners with institutions, advisors and individuals throughout the world to customize solutions that address their needs for income, growth and capital preservation. With more than 400 professionals focused exclusively on asset management, it offers an investment culture of independent thinking. Founded in 1939, the company provides solutions across equities, fixed income, hedge funds and private equity, and had $214 billion in assets under management as of June 30, 2013. For more information, please visit our website at www.nb.com.
1AUM outperformance data is asset-weighted and based on the gross of fee performance of the firm's traditional equity and fixed income strategies against their respective benchmarks. Individual strategies may have experienced negative performance during certain periods of time. See disclosures at the end of this material for additional information regarding AUM outperformance (including 3-and 5-yr statistics). Indexes are unmanaged and are not available for direct investment. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Neuberger Berman products and services may not be available in all jurisdictions or to all client types. Investing entails risks, including possible loss of principal. Investments in hedge funds and private equity are speculative and involve a higher degree of risk than more traditional investments. Investments in hedge funds and private equity are intended for sophisticated investors only. Indexes are unmanaged and are not available for direct investment. Past performance is no guarantee of future results.
All information is as of June 30, 2013, unless otherwise indicated and is subject to change without notice. Firm data, including employee and assets under management figures, reflects collective data for the various affiliated investment advisers that are subsidiaries of Neuberger Berman Group LLC. Firm history dates back to the 1939 founding of Neuberger & Berman (the predecessor to Neuberger Berman LLC).
Equity and Fixed Income AUM Benchmark Outperformance Note: For the period ending June 30, 2013, the percentage of total firm equity and fixed income Assets Under Management ("AUM") that outperformed the benchmark on 10-yr; 5-yr and 3-yr basis was as follows: Total Equity and Fixed Income AUM: 10-year: 88%; 5-year: 50%; and 3-year: 42%; Total Equity AUM: 10-year: 94%; 5-year: 26%; and 3-year: 18%; and Total Fixed Income AUM: 10-year: 77%; 5-year: 91%; and 3-year: 84%. Firm equity and fixed income Assets Under Management ("AUM") outperformance figures are based upon the aggregate assets for all Neuberger Berman LLC and Neuberger Berman Fixed Income LLC traditional equity and fixed income strategies that are included in the firm's institutional separate account ("ISA"), managed account/wrap ("MAG") and private asset management/high net worth ("PAM") composites. The results are based on the overall performance of each individual investment strategy against its respective strategy benchmark, and results are asset weighted so strategies with the largest amount of assets under management have the largest impact on the results. As of June 30,2013, eight equity teams/strategies accounted for approximately 50% of the total firm equity (PAM, ISA and MAG combined) assets reflected, and eight strategies accounted for approximately 62% of the total firm fixed income (PAM, ISA and MAG combined) assets reflected. The performance of the individual PAM equity teams/strategies is generally shown as a supplemental exhibit to the PAM Equity Composite. The respective ISA, MAG and PAM composite reports, as well as the PAM Management Team supplemental performance exhibits are available upon request. Individual strategies may have experienced negative performance during certain periods of time. Hedge fund, private equity and other private investment vehicle assets are not reflected in the AUM and product outperformance results shown. AUM outperformance for ISA, PAM and MAG strategies is based on gross of fee returns. Gross of fee returns do not reflect the deduction of investment advisory fees and other expenses. If such fees and expenses were reflected, AUM outperformance results would be lower.
This material has been issued for use by the following entities; in the U.S. and Canada by Neuberger Berman LLC, a U.S. registered investment advisor and broker-dealer and member FINRA/SIPC; in Europe, Latin America and the Middle East by Neuberger Berman Europe Limited, which is authorised and regulated by the UK Financial Conduct Authority and is registered in England and Wales, Lansdowne House, 57 Berkeley Square, London, W1J 6ER; in Australia by Neuberger Berman Australia Pty Ltd (ACN 146 033 801, AFS Licence No. 391401), which is licensed and regulated by the Australian Securities and Investments Commission to deal in, and to provide financial product advice for, certain financial products to wholesale clients; in Hong Kong by Neuberger Berman Asia Limited, which is licensed and regulated by the Hong Kong Securities and Futures Commission; in Singapore by Neuberger Berman Singapore Pte. Limited (Company No. 200821844K), which currently operates under an exemption from licensing under the Financial Advisers Act (Chapter 110) of Singapore for marketing of collective investment schemes to institutional investors; in Taiwan by Neuberger Berman Taiwan Limited, which is licensed and regulated by the Financial Services Commission ("FSC") to deal with specific professional investors or financial institutions for internal use only, and which is a separate entity and independently operated business, with SFB operating licence no.:(101) FSC SICE no.008, and address at: 10F, No. 1, Songzhi Road, Taipei, Telephone number: (02) 87268280; and in Japan and Korea by Neuberger Berman East Asia Limited, which is authorized and regulated by the Financial Services Agency of Japan and the Financial Services Commission of Republic of Korea, respectively (please visit http://www.nb.com/Japan/risk.html for additional disclosure items required under the Financial Instruments and Exchange Act of Japan). Except for the foregoing, this material is not intended for use or distribution within or aimed at the residents of any other country or jurisdiction. This document is not an advertisement and is not intended for public use or additional distribution in the following jurisdictions: Brunei, Thailand, Malaysia and China.
Neuberger Berman Management LLC, a registered Investment Advisor and Broker-Dealer, is the distributor of the Neuberger Berman mutual funds and is an affiliate of Neuberger Berman LLC. Member FINRA. “Neuberger Berman Management LLC” and the individual fund names in this piece are either service marks or registered service marks of Neuberger Berman Management LLC. The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC. © 2013 Neuberger Berman LLC. All rights reserved.