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Eisman Long Short Strategy

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Eisman Long Short Strategy

A true equity long short portfolio with the potential to generate alpha from both long and short positions.

  • Aims to identify investment opportunities both positive and negative created by sector, company or management disruption/change
  • Emphasis on achieving absolute, risk-adjusted returns over a market cycle
  • Develop market equity portfolio with a current focus on North America equities
  • Bottom-up, fundamental strategy with synthetic shorts independent of the long book
  • Portfolio net exposure dynamically shifts based on underlying market environment

Key Risks

Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.
Liquidity Risk: The risk that the strategy may be unable to sell an investment readily at its fair market value. In extreme market conditions, this can affect the portfolio’s ability to meet redemption requests upon demand.
Derivatives Risk: The strategy is permitted to use certain types of financial derivative instruments (including certain complex instruments). This may increase the portfolio’s leverage significantly, which may cause large variations in the value of your share. Investors should note that the portfolio may achieve its investment objective by investing principally in Financial Derivative Instruments (FDI). Certain investment risks apply in relation to the use of FDI.
Counterparty Risk: The risk that a counterparty will not fulfil its payment obligation for a trade, contract or other transaction on the due date.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems, including those relating to the safekeeping of assets or from external events.
Currency Risk: Investors who subscribe in a currency other than the base currency of the strategy are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment. If the currency of your investment is different from your local currency, then you should be aware that due to exchange rate fluctuations, the value of investments may increase or decrease if converted into your local currency.

Overview

Investment Approach

  • Independent long and short portfolio for additional alpha generation
  • Emphasis on bottom-up stock selection
  • A process that aims to identify investment opportunities both positive and negative created by sector, company or management disruption/change

Disrupters vs. "Disruptees"

Supply/ Demand Backdrop: Changing Growth Dynamics

Incentive Systems/Misaligned Compensation Structures

Regulatory
Changes

  • Winners & losers in sectors undergoing transformation
     
     
  • Identify how changing supply/ demand dynamics impacts companies across sectors
     
  • Inappropriate incentive structures can lead to consistently poor decisions by management teams
  • Will aim to uncover companies more able to adapt to new regulatory landscape

Investment Process

Macro Outlook

Sector Analysis

Idea Generation

Portfolio Construction

Financial System Overlay:

  • Financial system is a key early indicator of broad economic stress
  • Evaluate key metrics such as credit spreads and credit quality

Analyze each sector to establish an outlook and create investment themes

  • Growth dynamics
  • Industry fundamentals
  • Structural deterioration
  • Rates of change

Identify companies key to sector themes

  • Investment team insights
  • Unique network of investors with short bias
  • Neuberger Berman Global Equity Research Department
  • Sell-side analysts
  • Meet with company management

 

  • Modelling for upside/downside expectation
  • Evaluate conviction on potential investments
  • Volatility and liquidity analysis
  • Define the size for each position to build long and short portfolio
Learn more about the strategy

Management

Steven Eisman
Senior Portfolio Manager
30 Years of Industry Experience
6 Years with Neuberger Berman