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Asset Allocation Committee Outlook

1Q 2022
Hike Rates and Carry On
"Where do we see the risks? Twelve or 18 months ago, it would have been coronavirus. Now, we regard the pandemic as a disruptive rather than potentially catastrophic risk. Instead, persistent inflation and the potential for central bank policy errors are our top concerns."

—Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset Class

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Commentary

As we enter the new year, most of the global economy appears fundamentally in good shape, as demand continues to recover from the pandemic and supply chains are gradually restored. That outlook makes the case for holding risky assets. There appears to be little risk to income or “carry” from dividends and coupons, in particular, as analysts’ forecasts for earnings and defaults remain positive. The Asset Allocation Committee (“AAC” or “Committee”) is less sanguine about price volatility, however. Despite the recent spread of the Omicron variant, our primary concern is no longer the coronavirus, which, against vaccines and anti-viral treatments, can be disruptive but seems unlikely to result in the major lockdowns of 2020. Instead, our concern centers on the likely transition to an environment of persistent high inflation and higher interest rates. Higher discount rates imply lower present values for equities and bonds, particularly given current valuations. Pricing in a risk premium for central bank policy errors is likely to add to the potential volatility, in our view. For the AAC, that means 2022 is a year to focus on income from risky assets, while adjusting portfolios to help cushion against, and take advantage of, potential price volatility.

The International Monetary Fund forecasts 4.9% growth for the global economy in 2022. For the U.S., the Federal Reserve (“Fed”) expects 4.0% growth. Many confidence-related, lagging elements of GDP growth, such as inventories and capex, have yet to catch up with long-term trends. According to FactSet, analysts expect S&P 500 Index earnings to grow by 9.2% this year. Fitch Ratings anticipates a mere 1% default rate for U.S. high yield.

In short, business is expected to hum along nicely, with little apparent threat to dividend and coupon income. The AAC shares this outlook on fundamentals, but we are less sanguine about potential downside and volatility in asset prices as we move into 2022.

Inflation and Central Bank Policy Top the Risks

Where do we see the risks? Twelve or 18 months ago, it would have been coronavirus. Now, we regard the pandemic as a disruptive rather than potentially catastrophic risk. Instead, persistent inflation and the potential for central bank policy errors are our top concerns.

We saw the same reprioritization of risks by central banks in December’s flurry of activity. In Europe, Norway and the U.K. had among the highest recorded numbers of Omicron variant cases, but both of their central banks raised rates to combat inflation— Norges Bank for the second time in this cycle and the Bank of England (BoE) for the first time in more than three years.

Elsewhere, the European Central Bank (ECB) almost doubled its estimate for Eurozone headline inflation in 2022, to 3.2%, and announced that it would taper its Pandemic Emergency Purchase Program by March (albeit cushioning the blow by planning a temporary expansion of its existing asset purchase program). Even the Bank of Japan signaled an end to its corporate bond and commercial paper purchases in the first quarter of this year.

In the U.S., the Fed doubled the pace of its tapering, committing to end all asset purchases by March (the minutes of its December meeting, published in the New Year, also revealed an appetite for a rapid runoff of the central bank’s balance sheet, or “quantitative tightening”). Its “dot plot” of rate forecasts now suggests there will be three rate hikes in 2022. This is a remarkable change of tone: as recently as September, it was not even sure there would be one. Chair Jerome Powell also sounded notably more hawkish on inflation and the jobs market, and the Fed’s 2022 headline inflation forecast for 2022 was revised up from 2.2% to 2.6%.

The persistence of high inflation in the second half of 2021 has persuaded policymakers that they have to act, and their projections suggest that they are confident they can tame it next year—but not get it back to their long-term targets. We believe that creates a lot of uncertainty for investors for three reasons.

First, it has been at least a generation since the major central banks have faced this level of inflation pressure; the overwhelming weight of institutional thinking has been on how to combat disinflationary forces. Second, if today’s inflationary forces are mainly supply- rather than demand-driven, it is not clear that central banks have the tools to address them without simply slowing growth. And third, structural forces may be causing more persistent high inflation, from China’s economic reorientation and the re-thinking of global supply chains to the fight against climate change.

Cyclicality, Value, Income, Liquidity Risk

What does that mean for our asset-class views?

Simple arithmetic suggests that higher discount rates are likely to translate into lower valuations for both equities and bonds. Historical correlation suggests that a 0.15% rise in real rates translates into a point off of the S&P 500 Index multiple, for example. Add on a risk premium for the uncertainty around central bank policy and the path of inflation, and the steady income we anticipate for 2022 could be accompanied by elevated volatility in asset prices.

LOWER INFLATION, BUT STILL WELL ABOVE 2%, IS FORECAST FOR 2022
Placeholder Chart 
Source: FactSet, the Fed, European Central Bank. Data as of December 21, 2021. For illustrative purposes only. Nothing herein constitutes a prediction of future economic or market environments. Due to a variety of factors, actual events, including the characteristic of economic or market environments may vary significantly from any views expressed.
REAL RATES APPEAR TO BE A MAJOR DETERMINANT OF EQUITY MARKET PERFORMANCE
End-month S&P 500 price-to-earnings ratios and U.S. 10-year real yields, January 2018 to October 2021
Placeholder Chart 
Source: Bloomberg, Goldman Sachs, FactSet, Neuberger Berman. For illustrative purposes only. Nothing herein constitutes a prediction or projection of future events or future market behavior. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed. 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.

Based on economic fundamentals, the AAC retains its moderately positive view on risky assets. It favors equities over credit— particularly as credit may be more sensitive to a withdrawal of central bank liquidity and higher rates; and it favors credit over government bonds.

Within equities, however, we particularly favor value over growth for its potential to help buffer against downside risk to multiples, and its lower interest-rate sensitivity. So far, mainstream large-cap growth has been resilient in the face of potentially tighter monetary conditions, but we have started to see re-pricing on the more leveraged parts of the spectrum, such as pre-profitability IT and biotech. Most of all, we see an opportunity for a comeback in a subset of value, equity income: it has tended to exhibit even less interest-rate sensitivity; and should volatility become elevated, we think investors are likely to place a premium on a steady, growing stream of dividends.

Within credit, we retain a general tilt to high yield, while acknowledging a little more caution. The likelihood of a low default rate must be considered alongside the potential for volatility and pockets of illiquidity. It follows that we think performance this year will be due more to carry than spread tightening, and that tactical trading on spread widening may be necessary to generate incremental return opportunities. As in equities, lower interest-rate sensitivity, or shorter duration, is a priority: we believe it is more prudent to seek additional return potential from liquidity risk rather than interest-rate risk, leading to a positive view on loans and private debt, which offer floating rates and also the potential for robust demand to feed the ongoing private equity and M&A recovery.

A Preference for Non-U.S. Developed Markets

Regionally, the outlook remains complex.

In our view, a mid-cycle expansion should help support the more cyclical non-U.S. economies and markets, just as we expect it to help support more cyclical sectors. The strengthening U.S. dollar of the past seven months has been a major factor preventing non-U.S. outperformance, but we see signs of an end to that momentum: European and U.S. inflation forecasts are now fairly aligned and, particularly with President Joe Biden’s “Build Back Better” stimulus now in doubt, there is greater potential for non-U.S. economies to raise their share of global GDP growth. We therefore remain overweight in our views on European and Japanese equities (and underweight Bunds and Japanese government bonds).

A WEAKER U.S. DOLLAR COULD FAVOR NON-U.S. MARKETS
Placeholder Chart 
Source: FactSet. Data as of January 6, 2022. For illustrative purposes only. Nothing herein constitutes a prediction or projection of future events or future market behavior. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed. 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 would normally be a favorable background for emerging markets. On this occasion, however, the AAC has decided to downgrade emerging markets equities to neutral.

There are a number of factors behind this decision: many emerging countries have already been forced further into their rate-hiking cycles than their developed-world peers; political and policy uncertainty is rising, notably in Latin America and Turkey, but also in emerging Europe; the emerging world is highly exposed to slowing growth in China; and it has fewer options for mitigating the ongoing impact of the coronavirus pandemic. The AAC’s overweight view on emerging markets debt remains in place, but our estimation of tail risk has risen: this view will be held with caution until there is more clarity on the path of global growth and the U.S. dollar.

Mitigating and Taking Advantage of Volatility

With equity and bond valuations stretched and at risk from rising real rates, the Committee reiterates its positive views on alternative investments that can potentially offer uncorrelated returns, excess returns generated away from the volatility of the public markets, mitigation of traditional asset class volatility, or returns derived from volatility itself.

We upgraded our underweight view on hedged strategies to neutral, with a particular focus on market-neutral and uncorrelated approaches, including insurance-linked strategies. The view might have been more positive were it not for the difficulties many macro investors have experienced over the past two years: dispersion between managers has been extreme.

We maintain our overweight view on commodities, as a portfolio diversifier and for exposure to further potential inflation surprises.

Private markets remain in favor, partly because they do not reprice with the same volatile frequency as the public markets; partly because valuations generally remain attractive relative to those in public markets; but mainly because private equity managers have more ways to improve operations and margins than public equity managers, and are therefore less reliant on multiple expansion for returns.

COULD WE BE RETURNING TO A HIGHER-VOLATILITY ENVIRONMENT?
CBOE S&P 500 Volatility Index (VIX)
Placeholder Chart 
Source: FactSet. Data as of January 6, 2022. For illustrative purposes only. Nothing herein constitutes a prediction or projection of future events or future market behavior. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed. 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.

Finally, for those looking for potential sweet spots in the search for income in a volatile environment, the Committee takes a positive view on equity index put option writing. Writing puts is akin to selling insurance to equity investors, for a premium, against downside risk and elevated volatility. It has a long history of generating equity-like returns with meaningfully lower volatility, and it has tended to perform particularly well during periods of elevated volatility, when put option buyers are willing to pay more for insurance. Incidentally, now that traded options are available on Bitcoin, more adventurous asset allocators might wish to explore the very high premiums available for writing puts on this relatively new, extraordinarily volatile digital asset.

There is perhaps no better example of how put writing can generate carry from sometimes extreme volatility expectations, which, in our view, is what makes it especially interesting now. With the equity and credit income we anticipate over the next 12 months making the case for a positive view on risky assets, but with heightened uncertainty as interest rates adjust, we think those two words, carry and volatility, may sum up the year ahead.

Fixed Income Market Views
N0298_0122_Abacus 1a_Digital_1140px 
N0298_0122_Abacus 2b_Digital-01
Investment Grade Fixed Income
  • The Committee maintained its underweight view.
  • The prospect of more stubborn, supply-led inflation dynamics has started to push government bond yields back up, but there remains some way to go before they present attractive valuations or reliable diversification.
Non-U.S. Developed Market Bonds
  • The Committee maintained its underweight view.
  • Yield curves remain suppressed and flat and we see more attractive value in high yield and equity markets.
High Yield Corporates
  • The Committee maintained its overweight view.
  • The AAC believes that the continuing growth recovery and conservative management of corporate balance sheets will be supportive of credit markets in general, although returns are now likely to come through coupon income and tactical trading rather than persistent spread tightening.
  • Rising rates and tight spreads make the outlook riskier, leaving this view under closer scrutiny as we navigate the coming months.
Emerging Markets Debt
  • The Committee maintained its overweight view.
  • While our median return outlook for 2022 remains unchanged, we think the tail risks are growing.
  • The pandemic still poses bigger risks to emerging than developed economies, and policy and political tail risk is growing in markets as diverse as Turkey, emerging Europe and Latin America.
  • The view will be held with caution until there is more clarity on the path of growth and the U.S. dollar.
Global Equity Market Views
N0298_0122_Abacus 1a_Digital_1140px
N0298_0122_Abacus 2a_Digital-01_rev
U.S. Equities
  • The Committee maintained its underweight view on U.S. large caps and its overweight view on U.S. small and mid-caps.
  • The AAC believes that the continuing growth recovery will be supportive of higher quality small caps.
  • U.S. large caps generally trade with high valuations and exhibit high interest-rate sensitivity, but the Committee maintains its preference for cyclical and value stocks within the U.S.
  • Equity income offers relatively attractive value, very low sensitivity to interest rates, and a buffer against potential price volatility.
Non-U.S. Developed Market Equities
  • The Committee maintained its overweight view.
  • While they are more highly geared to the growth recovery, Japanese and European equities remain relatively cheap and in our view that currently presents lower risk.
  • Relative valuation improved during the second half of 2021, largely due to the reversal of many pro-cyclical and reflation-and-recovery trades, and the strengthening of the U.S. dollar, which we believe is overdone.
  • On the margins, the AAC favors Japan, where we believe big changes in management attitudes to shareholder value are creating substantial opportunity.
Emerging Markets Equities
  • The Committee downgraded its view from overweight to neutral.
  • The pandemic still poses bigger risks to emerging than developed economies, and emerging markets could be more exposed than other non-U.S. markets to tighter financial conditions.
  • Some Committee members are beginning to look opportunistically at China after a year of policy-induced volatility and new monetary and fiscal stimulus.
Real and Alternatives Asset Market Views
N0298_0122_Abacus 1c_Digital_1140px
N0298_0122_Abacus 2c_Digital-01
Commodities
  • The Committee maintained its overweight view.
  • Commodities increasingly appear to be one the few reliable ways to hedge against the potential for persistent cost-push, supply-side inflation pressures.
  • Energy stands out, and especially natural gas: on top of pandemic-related supply constraints, which have compounded years of underinvestment, the northern-hemisphere winter and a pick-up in seasonal travel looks likely to add demand pressure onto an already fragile market.
Hedge Funds
  • The Committee upgraded its view from underweight to neutral.
  • With equity and bond valuations stretched and at risk from rising real rates, there is a growing role for alternative investments that have tended to exhibit uncorrelated returns, mitigate the volatility of traditional asset classes or take advantage of that volatility.
  • The Committee is particularly focused on equity index put writing, which tends to perform well during periods of elevated volatility.
  • The view might have been more positive were it not for the difficulties macro investors have had getting their calls right over the past two years: dispersion between managers has been extreme.
Private Equity
  • The Committee maintained its overweight view.
  • While there are concerns about valuations, they remain attractive relative to public markets, and are driving deals in high-quality, fast-growing businesses with very low financial leverage; the ability to create value away from the potential volatility of the public markets may also provide some portfolio stability as the cycle matures.
  • Despite some concerns about excess capital, many investors are constrained from increasing their allocations or making new commitments because they are already exceeding their limits, following many months of outperformance of public markets and early capital calls from managers that are finding abundant investment opportunities.
Private Debt
  • The Committee maintained its overweight view.
  • Credit selection is important in a market that is increasingly borrower-friendly, with full valuations and already loose covenants loosening further; that said, valuations remain attractive relative to public-market high yield credit, and floating rates may provide a buffer against tightening monetary policy.
Private Real Estate
  • The Committee maintained its overweight view.
  • The sector’s inflation sensitivity is attractive, economic reopening is removing a major headwind to this sector, and we believe post-pandemic growth dynamics will continue to support key sectors such as data centers, warehouses, industrial and multifamily residential.
Currencies
USD
  • The AAC maintained its underweight view.
  • The currency is still overvalued based on purchasing power parity (PPP) metrics and faces headwinds from the U.S.’s twin deficits.
  • The dollar could benefit from this being a U.S.-led recovery, however, especially as the Fed becomes more hawkish, this could also generate a feedback loop if higher long-dated yields trigger a flight to the safety of the dollar.
EUR
  • The AAC downgraded its view from overweight to neutral.
  • The euro is undervalued based on purchasing power parity (PPP) metrics, and benefits from a large current account surplus and better 2022 growth expectations than the U.S., but a more hawkish Fed is providing support for the dollar, and a meaningful shift in the stance of the European Central Bank seems unlikely at least until the disruption of the Omicron variant has passed.
JPY
  • The AAC maintained its overweight view.
  • Both PPP and real exchange rates suggest the JPY is undervalued, market participants are now very short the currency, and hedged foreign investments are at their most attractive levels for years for JPY-based investors.
  • The country’s slow pace of vaccination could be a higher risk in the face of the spread of the Omicron variant of the coronavirus.
GBP
  • The AAC maintained its neutral view.
  • The U.K.’s budget is growth-supporting this year, the BoE has become the first of the three four major central banks to hike rates, and the GBP still appears undervalued based on PPP measures.
  • The view remains marginal, as market participants are long GBP, premature fiscal tightening remains on the table, and Brexit issues continue to present tail risks.
CHF
  • The AAC maintained its underweight view.
  • The Swiss franc is still very overvalued on PPP measures, and market participants remain very long in their positioning despite this year’s removal of many tail risks associated with the Eurozone.
  • Risks to the view include Switzerland’s large current account surplus and the potential for a flight from risk as the Fed embarks on tapering and rate hikes.
Up for Debate
We Anticipate More Volatility—but When?

AAC members broadly agreed on two things this quarter: optimism that next year can be a tolerable year for risky assets, with the potential for price downside to be more than offset by earnings growth and carry; but concern that downside risk and elevated volatility are far more likely than in 2021, due to expectations for higher rates and tighter financial conditions as we grapple with inflation and move deeper into the middle part of the business cycle.

There was less agreement about when during the year the major bouts of volatility are likely to strike, however, and the debate centered on how the dynamics around inflation, central bank policy and the path of real rates might play out through the course of the year. Some Committee members anticipate volatile re-pricing in the first half of the year, with things calming down as the longer-term outlook clarifies in the second half. Others think that the potential trouble lies later in the year.

Those in the first camp point out that if the Fed gets tapering done by March, after confirming that it could then move straight onto rate normalization, it may have hiked rates twice by midyear. Fixed income market pricing suggests that a hike in March is now more likely than not. The first hike could even be a statement-making 50 basis points. As liquidity drains from markets, nominal rates edge upwards and inflation begins to ease, these AAC members argue that real rates would rise, equity valuation multiples would contract, and investors would re-price for generally tighter financial conditions.

They believe investors ought to have all the information they need to reprice equities and bonds down to lower valuations before midyear, and they see tapering and the subsequent runoff of the Fed’s balance sheet as the key test of how much tightening, and at what pace, markets can bear.

The second camp expects investors to welcome central banks’ decisive moves, seeing them as the short, sharp shock that will move us into a less inflationary mid-cycle expansion, with fewer subsequent rate hikes required. If victory can be declared that quickly, 2022 could be a smoother year than we expect. But the proponents of this view also note that fixed income markets, in line with central bank forecasts, have priced for a very big drop in inflation in the latter half of the year, and they are skeptical. Should inflation prove more stubborn than expected, investors may conclude that not just higher but positive real rates are required to gain control of inflation—which could pose a serious threat to economic growth. These AAC members suggest that this central bank-induced slowdown is the potential catalyst for more turbulent repricing, and that the real test is likely to be the path of inflation through the third and fourth quarters.

While the AAC’s strategic views are defined by its two points of consensus—a tolerable year for carry from risky assets will be accompanied by likely elevated price volatility—its tactical views will be informed by how this debate resolves itself as we move through 2022.

MARKETS ARE NOW PRICING FOR “LIFT-OFF” BY THE FED IN MARCH
Market-derived probability that at least one rise in the Fed Funds Rate will be completed by the time of each FOMC meeting
Placeholder Chart 
Source: CME Group. Data as of January 6, 2022. For illustrative purposes only. Nothing herein constitutes a prediction of future economic or market environments. Due to a variety of factors, actual events, including the characteristic of economic or market environments may vary significantly from any views expressed. Past performance is no guarantee of future results.
Time for Opportunistic Investing in China?

If inflation and central bank policy errors are our top-ranked risk, and coronavirus developments our third, China retains its place as our second-biggest concern. Its deliberate reorientation away from fast growth toward more equally balanced economic activity and the rising heat of its geopolitical relations with the U.S. have the potential to affect markets beyond its own shores.

Last quarter, while some Committee members argued that this level of uncertainty made China itself an unattractive market, others countered that China has always been a policy-driven market, and that investors ought simply to follow the government and head for opportunities in sectors such as alternative energy, photovoltaics, wind power, smart vehicles and semiconductors.

This quarter, a number of Committee members doubled down on the latter view, listing China equities and particularly China’s technology sector among their suggestions for opportunistic investment. They point to policy divergence from the West, as both monetary and fiscal policy loosen in response to stresses in the real estate debt sector and a resurgence of COVID-19 cases. They point to outperformance among smaller Chinese companies. They point to recovering property prices, which tend to feed into stock market prices. And they point to the low valuations of some of the companies perceived to be among the losers from the recent policy pivot. Overall, they argue that China may be a unique source of growth at a reasonable price in global public markets.

These views do not yet carry enough weight on the Committee to move our outlook for Chinese equities, but that may change as we watch for the impact of the latest stimulus in this market.

COULD CHINA’S TECH SUPERSTARS BE UNDERVALUED?
Next 12 months price-to-earnings ratios
Placeholder Chart 
Source: FactSet. Data as of December 21, 2021. For illustrative purposes only. This material is not intended as a formal research report and should not be relied upon as a basis for making an investment decision. The firm, its employees and advisory accounts may hold positions of any companies discussed. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. Nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
OUTLOOK
The Asset Allocation Committee Outlook
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Asset Allocation Committee
About the Members
Neuberger Berman’s Asset Allocation Committee meets every quarter to poll its members on their outlook for the next 12 months on each of the asset classes noted and, through debate and discussion, to refine our market outlook. The panel covers the gamut of investments and markets, bringing together diverse industry knowledge, with an average of 29 years of experience.
Joseph V. Amato
President and Chief Investment Officer—Equities
27 Years of Industry Experience
27 Years with Neuberger Berman
Erik L. Knutzen, CFA, CAIA
Chief Investment Officer—Multi-Asset Class
36 Years of Industry Experience
7 Years with Neuberger Berman
Ashok Bhatia, CFA
Deputy Chief Investment Officer—Fixed Income
28 Years of Industry Experience
4 Years with Neuberger Berman
Thanos Bardas, PhD
Co-Head of Global Investment Grade Fixed Income
23 Years of Industry Experience
23 Years with Neuberger Berman
Joseph V. Amato, President and Chief Investment Officer—Equities

Joseph V. Amato serves as President of Neuberger Berman Group LLC and Chief Investment Officer of Equities. He is a member of the firm’s Board of Directors and its Audit Committee. His responsibilities also include overseeing the firm’s Fixed Income business. 

Previously, Joe served as Lehman Brothers’ Global Head of Asset Management and Head of its Neuberger Berman subsidiary, beginning in April 2006.  From 1996 through 2006, Joe held senior level positions within Lehman Brothers’ Capital Markets business, serving as Global Head of Equity Research for the majority of that time.  Joe joined Lehman Brothers in 1994 as Head of High Yield Research.  Prior to joining Lehman Brothers, Joe spent ten years at Kidder Peabody, ultimately as head of High Yield Research. 

He received his BS from Georgetown University and is a member of the University’s Board of Regents and the Business School’s Board of Advisors. He is also Co-Chair of the New York City Board of Advisors of Teach for America, a national non-profit organization focused on public education reform.

Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset Class
Erik Knutzen, CFA, CAIA and Managing Director, is Co-Head of the Neuberger Berman Quantitative and Multi-Asset Class investment team and Multi-Asset Class Chief Investment Officer. Erik joined in 2014 and is responsible for leading the management of multi-asset portfolios, driving the asset allocation process on a firm-wide level, as well as engaging with clients on strategic partnerships and multi-asset class and quantitative solutions. Previously, Erik was with NEPC, LLC where he served as chief investment officer since 2008. As CIO, he oversaw a group of more than 45 investment professionals, including dedicated research teams focused on Alternative Investments, Traditional Strategies and Asset Allocation for NEPC’s client base with, collectively, more than $800 billion in assets under advisement. He has over 25 years of experience in the financial services industry, including nine years at Putnam Investments. In 2013, he was recognized by aiCIO magazine, ranking atop their 25 most influential investment consultants. Erik holds an MBA from Harvard Business School and a BA from Williams College. He has been awarded the Chartered Financial Analyst designation, as well as the Chartered Alternative Investment Analyst designations. Erik sits on the Boards of the Massachusetts Audubon Society, where he is a member of their Investment Committee, and of Start Small Think Big.

Ashok Bhatia, CFA, Deputy Chief Investment Officer—Fixed Income
Ashok K. Bhatia, CFA, Managing Director, joined the firm in 2017. Ashok is the Deputy Chief Investment Officer for Fixed Income. He is a lead portfolio manager on multi-sector fixed income strategies and is also a member of the Multi-Asset Class portfolio management team, the Fixed Income Investment Strategy Committee and the firm’s Asset Allocation Committee. Previously, Ashok has held senior investment and leadership positions in several asset management firms and hedge funds, including Wells Fargo Asset Management, Balyasny Asset Management, and Stark Investments. Ashok has had investment responsibilities across global fixed income and currency markets. Ashok began his career in 1993 as an investment analyst at Morgan Stanley. Ashok received a BA with high honors in Economics from the University of Michigan, Ann Arbor, and an MBA with high honors from the University of Chicago. He has been awarded the Chartered Financial Analyst designation.
Thanos Bardas, PhD, Co-Head of Global Investment Grade Fixed Income
Thanos Bardas, PhD, Managing Director, joined the firm in 1998. Thanos is the Global Co-Head of Investment Grade and serves as a Senior Portfolio Manager on Global Investment Grade and Multi-Sector Fixed income strategies. He sits on the firm’s Asset Allocation Committee and Fixed Income’s Investment Strategy Committee, and is a member of the Fixed Income Multi-Sector Group. Thanos also leads the Global Rates team in determining rates exposure across various portfolio strategies and oversees both inflation and LDI investments. Thanos graduated with honors from Aristotle University, Greece, earned his MS from the University of Crete, Greece, and holds a PhD in Theoretical Physics from State University of New York at Stony Brook. He holds FINRA Series 7 and Series 66 licenses.
Timothy F. Creedon, CFA
Director, Global Equity Research
24 Years of Industry Experience
21 Years with Neuberger Berman
Tokufumi Kato, PhD
Senior Portfolio Manager
13 Years with Neuberger Berman
Hakan Kaya, PhD
Senior Portfolio Manager
16 Years of Industry Experience
14 Years with Neuberger Berman
David G. Kupperman, PhD
Co-Head, NB Alternative Investment Management
23 Years of Industry Experience
10 Years with Neuberger Berman
Timothy F. Creedon, CFA, Director, Global Equity Research
Timothy Creedon, CFA, Managing Director, joined the firm in 2005 and has been the Director of Research for the Global Equity Research Department since 2011. Tim previously served as an equity analyst covering Consumer companies for the firm. Before that, he worked at Lehman Brothers, also covering consumer stocks, and worked in the Private Equity group at Lehman Brothers, where he was responsible for analyzing and executing investments in early-stage telecom/media companies. Tim began his career at Merrill Lynch, where he worked in Investment Banking, covering the Communications industry. He is a CFA charterholder and graduated magna cum laude from Georgetown University’s School of Foreign Service with a concentration in International Economics. Tim is a member of the firm’s Operating Committee and Investment Risk Committee, and he also serves on the Board of Room to Grow in New York City.
Tokufumi Kato, PhD, Senior Portfolio Manager
Fumi Kato, PhD, Managing Director, joined the firm in 2009. Fumi is Head of Portfolio Construction and Risk Management and serves as a Portfolio Manager in the Multi-Asset Class Investment Team. He is responsible for portfolio construction, asset allocation, risk management and daily management of multi-asset class portfolios, as well as cross-asset class research and idea generation. Fumi also sits on the firm’s Asset Allocation Committee and the Model Risk Subcommittee. Prior to joining the team, he was a member of the Investment Strategy and Risk team, where his focus was multi-asset class solutions for strategic partners and global institutional clients. He also worked at Neuberger Berman East Asia, where he was a client portfolio manager for strategies across asset classes. Prior to joining the firm, Fumi served as a quantitative analyst in the Investment Management team at SPARX Asset Management. Fumi earned his BS in Physics and Mathematics with honors and holds an MA and a PhD in Physics from State University of New York at Stony Brook. Fumi is on the Board of Directors of Asia Initiatives, a 501(c)(3) nonprofit organization.
Hakan Kaya, PhD, Senior Portfolio Manager

Hakan Kaya, PhD, Managing Director, joined the firm in 2008. Hakan is a Senior Portfolio Manager on the Quantitative and Multi-Asset Class (“QMAC”) team responsible for Global Risk Balanced Portfolios and Commodities. He contributes to asset allocation research with a focus on risk management and has a record of publishing research in both refereed journals and white papers on timely investment issues. Prior to joining the firm, he was a consultant with Mount Lucas Management Corporation where he developed weather risk and statistical relative value models for commodities investment. Dr. Kaya received BS degrees summa cum laude in Mathematics and Industrial Engineering from Koc University in Istanbul, Turkey and holds a PhD in Operations Research & Financial Engineering from Princeton University.

David G. Kupperman, PhD, Co-Head, NB Alternative Investment Management
David Kupperman, PhD, Managing Director, is Co-head of the NB Alternative Investment Management team and a member of its Investment Committee. He is also on the Investment Committee of the Specialty Finance Group which he co-founded after years of investing experience in the consumer credit space, as well as Chairman of the NB Insurance-Linked Strategies Underwriting Committee and a Director of NB Reinsurance Ltd. David also sits on the firm’s Asset Allocation Committee, the Investment Risk Committee and the Model Risk Subcommittee. Prior to joining the firm in 2011, David was a partner and member of the investment committee at Alternative Investment Management, LLC. Before that, he was a managing director and member of the executive committee at Paloma Partners Management Company, a multi-strategy hedge fund focused on relative value trading strategies. Previously, David was a principal at The Carlyle Group, one of the world’s largest alternative investment managers. Prior to joining Carlyle, he was a vice president in both the private equity and portfolio strategy groups at Goldman, Sachs & Co. In his portfolio strategy role, he authored papers on asset allocation and helped develop Goldman’s quantitative asset allocation framework for high-net-worth investors. David is the Chairman of The Johns Hopkins Physics & Astronomy Advisory Council and is a member of the Cornell University Council. David holds an MA and a PhD in physics from Johns Hopkins University and a BA and an ME from Cornell University.

Ugo Lancioni
Head of Global Currency
26 Years of Industry Experience
14 Years with Neuberger Berman
Suzanne F. Peck
Head of Investments – Private Wealth Management
27 Years of Industry Experience
1 Year with Neuberger Berman
Raheel Siddiqui
Senior Research Analyst
25 Years of Industry Experience
17 Years with Neuberger Berman
Robert Surgent
Senior Portfolio Manager
30 Years of Industry Experience
1 Year with Neuberger Berman
Ugo Lancioni, Head of Global Currency
Ugo Lancioni, Managing Director, joined the firm in 2007. Ugo is the Head of Global Currency and serves as Senior Portfolio Manager on Global Investment Grade and Multi-Sector Fixed Income strategies. He sits on the firm’s Asset Allocation Committee and is a member of the senior investment team that sets overall portfolio strategy for Global Investment Grade. Ugo leads the Currency team in determining FX exposures across various portfolio strategies. Prior to joining the firm, Ugo was employed by JP Morgan for 11 years. At JP Morgan AM he worked as Currency Strategist and Portfolio Manager in charge of the FX risk in Fixed Income Portfolios. Prior to this, Ugo worked as a Trader at JP Morgan Bank, both in London and Milan, in the short term interest rate trading group (STIRT) where he was responsible for foreign exchange forwards market making and rates derivatives trading. Ugo received a Master’s in Economics from the University “La Sapienza” in Rome.
Suzanne F. Peck, Head of Investments – Private Wealth Management
Suzanne F. Peck, Managing Director, is the Head of Investments for Private Wealth Management at Neuberger Berman, and a member of the firm’s Asset Allocation Committee. Prior to joining the firm in 2021, she was Head of BlackRock's Endowments and Foundations effort, which provides investment management services and risk advisory solutions to endowments and foundations, including outsourced CIO services. Prior to joining BlackRock in 2013, Suzanne spent 18 years with Goldman Sachs, most recently in its Investment Management Division, where she served in a number of roles including Portfolio Manager and member of the Investment Committee of Institutional Client Solutions. She also led a team that built an outsourced CIO offering for endowments and foundations. Previously, Suzanne spent nine years in the Investment Banking Division. Suzanne serves on the Investment Committees and Boards of UJA-Federation of NY and the New-York Historical Society. She earned a BA in history from Columbia College, MA in economics from New York University and MBA from Columbia Business School.
Raheel Siddiqui, Senior Research Analyst

Raheel Siddiqui, Senior Vice President, Senior Research Analyst, joined the firm in 2004. Raheel is the Portfolio and Quantitative Strategist in the Neuberger Berman Global Equity Research Department. In this role he researches impending inflection points in the business cycle, risk appetite, inflation, global asset classes, US sectors, style (growth vs. value), and size to enhance fundamental stock selection and portfolio construction processes by taking advantage of emerging trends not fully appreciated by the market. His research spans finding systematic ways of distilling leading or confirming messages from macroeconomic, quantitative, derivatives data, and behavioral data as well as periodically evaluating portfolios for efficient asset allocation.

Prior to this role, Raheel was a part of Lehman Brothers US Equity Strategy Team where he co-authored over 100 strategy reports, many of which were quoted in the Wall Street Journal, Financial Times, and Barron’s. Raheel also worked as a senior member of the Corporate Development team at Monsanto for six years, where he developed industry leading and award winning approach for valuing genomics assets.

Raheel earned MS/BS degrees in Biochemical Engineering from the Indian Institute of Technology and an MBA from Columbia University. Raheel has also been published with the American Institute of Physics.

Accolades referenced are issued by independent third-parties and information regarding specific criteria for accolades is available upon request and generally may be found on such third-party’s website. Barron’s rankings are based on a proprietary formula that considers various factors: assets under management, revenues generated by advisors for their firms, and the quality of the advisors’ practices. Investment performance is not an explicit criterion because performance is often a function of each client’s appetite for risk. Third-party accolades referenced do not reflect the experiences of any Neuberger Berman client and readers should not view such information as representative of any particular client’s experience or assume that they will have a similar investment experience as any previous or existing client. Third-party accolades are not indicative of the past or future performance of any Neuberger Berman product or service.

Robert Surgent, Senior Portfolio Manager
Bob Surgent joined the firm in March 2020 as a Managing Director and Senior Portfolio Manager working in the Multi-Asset group. Prior to Neuberger Berman, Bob was a Managing Director at Goldman Sachs managing the Multi Asset Tactical Portfolio for GSAM's GPS Group where he was a member of the Investment Committee providing input for longer term asset allocation decisions as well as shorter term absolute return opportunities. Previously, Bob was a Macro Portfolio Manager at Tudor Investments and a Global Macro Proprietary trader at Goldman Sachs in both the London and New York offices. Before joining the Macro Prop Team at Goldman, Bob was a member of the Equity Divisions Principle Strategies Group specializing in the European Tech, Telecom, and Financial sectors. Bob graduated with an MBA in Finance from the Wharton School of Business in 1993 and from the University of Pennsylvania in 1988 with a Bachelors in Economics.
Brad Tank
Chief Investment Officer—Fixed Income
40 Years of Industry Experience
19 Years with Neuberger Berman
Anthony Tutrone
Global Head of Alternatives
34 Years of Industry Experience
34 Years with Neuberger Berman
Brad Tank, Chief Investment Officer—Fixed Income
Brad Tank, Managing Director, joined the firm in 2002 and is the Chief Investment Officer and Global Head of Fixed Income. He is a member of Neuberger Berman’s Operating, Investment Risk, Asset Allocation Committees and Fixed Income’s Investment Strategy Committee, and leads the Fixed Income Multi-Sector Group. From inception in 2008 through 2015, Brad was also Chief Investment Officer of Neuberger Berman’s Multi-Asset Class Investment business and remains an important member of that team along with the firm’s other CIOs. From 1990 to2002, Brad was director of fixed income for Strong Capital Management in Wisconsin. He was also a member of the Office of the CEO and headed institutional and intermediary distribution. In 1997, Brad was named “Runner Up” for Morningstar Mutual Fund Manager of the Year. From 1982 to 1990, he was a vice president at Salomon Brothers in the government, mortgage and financial institutions areas. Brad earned a BBA and an MBA from the University of Wisconsin.

Anthony Tutrone, Global Head of Alternatives
Anthony Tutrone is the Global Head of NB Alternatives and a Managing Director of Neuberger Berman. He is a member of all Neuberger Berman Private Equity’s Investment Committees. Anthony is also a member of Neuberger Berman's Partnership, Operating, and Asset Allocation Committees. Prior to Neuberger Berman, from 1994 to 2001, Anthony was a Managing Director and founding member of The Cypress Group, a private equity firm focused on middle market buyouts that managed approximately $3.5 billion of commitments. Anthony began his career at Lehman Brothers in 1986, starting in Investment Banking and in 1987 becoming one of the original members of the firm’s Merchant Banking Group. This group managed a $1.2 billion private equity fund focused on middle market buyouts. He has been a member of the board of directors of several public and private companies and has sat on the advisory boards of several private equity funds. Anthony earned an MBA from Harvard Business School and a BA in Economics from Columbia University.