This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice. This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. Investment decisions and the appropriateness of this material should be made based on an investor’s individual objectives and circumstances and in consultation with his or her advisors. Third-party economic or market estimates discussed herein may or may not be realized and no opinion or representation is being given regarding such estimates. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. 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. 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. Certain Neuberger Berman products and services may not be available in all jurisdictions or to all client types.
This material may include estimates, outlooks, projections and other “forward-looking statements.” Due to a variety of factors, actual events or market behaviour may differ significantly from any views expressed. 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.
The hypothetical model portfolios shown are for illustrative purposes only and are based upon various assumptions, projections or other information generated by Neuberger Berman regarding investment outcomes. Growth rate assumptions and projections are hypothetical and do not reflect actual investment results and are not guarantees of future results. Calculations are based upon asset allocation models and capital market assumptions, which are updated periodically. Changes in assumptions would impact the hypothetical results shown. The estimates do not reflect actual investment results and are not guarantees of future results. Results are gross of fees and do not reflect the fees and expenses associated with managing a portfolio. If such fees and expenses were reflected, results shown would be lower. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
The S&P 500 Index consists of 500 U.S. stocks chosen for market size, liquidity and industry group representation. It is a market value-weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value.
The Bloomberg Barclays U.S. Corporate 1-5 Years Bond Index measures the investment grade, fixed-rate, taxable corporate bond market with one to five years left to maturity. It includes USD-denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers.
The ProShares Global Listed Private Equity ETF (PEX) is an exchange-traded fund that tracks the performance of the LPX Direct Listed Private Equity Index, which is designed to represent the global performance of the 30 most highly capitalised and liquid Listed Private Equity companies, diversified across regions, financing styles and vintages, which pursue a Direct private equity investment strategy.
The FTSE Nareit All Equity REITs Index contains all tax-qualified REITs with more than 50% of total assets in qualifying real estate assets other than mortgages secured by real property that also meet minimum size and liquidity criteria. It is part of the FTSE Nareit U.S. Real Estate Index Series, which is designed to present investors with a comprehensive family of REIT performance indexes that spans the commercial real estate space across the U.S. economy. The index series provides investors with exposure to all investment and property sectors. In addition, the more narrowly focused property sector and sub-sector indexes provide the facility to concentrate commercial real estate exposure in more selected markets.
The HFRI Fund of Funds Composite Index is designed to track the equal-weighted performance of funds of funds, as reported by the hedge fund managers listed within the HFR Database, which report in U.S. dollars monthly, net of all fees performance and assets under management, and have either (a) $50 million assets under management or (b) at least $10 Million assets under management on the last reported month prior to the index rebalance, and have been actively trading for at least 12 months.
Description of NB’s Proprietary Stochastic Model
Neuberger Berman Private Equity uses stochastic modeling capabilities to forecast capital call / distribution activity and Net Asset Value (“NAV”) development of private market investments. NB’s stochastic model uses a Monte Carlo Simulation, projecting, with varying levels of confidence, how a private markets portfolio of funds, co-investments and secondaries will develop over time. The model projects capital calls, distributions and NAV development based on asset class, current NAV, vintage year and drawn amount of each investment in the portfolio, as well as additional (potential) future investments and commitments.
The input and assumptions used in the model are based on information from Thomson Reuters’s Thomson ONE database covering 25 years of private equity industry data (cash flow, NAV development, etc.). Cash flows represent the pooled cash flows of all private equity funds that report performance data to Thomson Reuters and are net of all underlying fund fees and expenses. The industry performance assumptions used in the analysis are based on long-term averages from the Thomson ONE database, not on NB’s historical or projected returns. The inputs used within the model include the median historical net IRR, median historical yield, average holding period, mean and standard deviation of contributions for various private market asset classes (i.e., large-cap, small & mid-cap buyout, venture & growth capital, special situations, private credit, real estate and infrastructure debt) and strategies (i.e., primary fund investments, secondary fund investments, direct co-investments and direct credit investments). Yield is calculated as actual annualized cash coupon of current unrealized investments divided by current unrealized invested capital.
The assumptions are for illustrative purposes only and are not intended as a promise or prediction of performance. There can be no assurance that the fund will achieve comparable results, that targeted diversification or asset allocations will be met, that the fund will be able to or will ultimately elect to implement the assumptive investment strategy and approach described in the model. Alternative assumptions may result in significant differences or complete loss of capital in such projections.
Note, all targets and underlying assumptions can be adjusted if desired as requested by the client. There is no guarantee that returns targeted in any underwriting process will be realized or achieved or that an investment strategy will be successful, and actual returns may be significantly lower than the targeted returns referenced herein. Investors should keep in mind that the securities markets are volatile and unpredictable. There are no guarantees that the historical performance of an investment, portfolio, or asset class will have a direct correlation with its future performance.
This presentation (the “Presentation”) is being furnished on a confidential basis for informational and discussion purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any security.
The information contained herein must be treated in a confidential manner and may not be reproduced, used or disclosed, in whole or in part, without the prior written consent of Neuberger Berman Group LLC or the fund. Disclosure to persons other than the recipients and their representatives is prohibited. Past performance is not necessarily indicative of future results. There can be no assurance that the fund will achieve comparable results, that targeted diversification or asset allocations will be met or that the fund will be able to implement its investment strategy and investment approach or achieve its investment objective. Actual returns on unrealized investments will depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, legal and contractual restrictions on transfer that may limit liquidity, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions and circumstances on which the valuations used in the prior performance data contained herein are based. Accordingly, the actual realized returns on unrealized investments may differ materially from the returns indicated herein.
Statements contained in this Presentation that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of the general partner of the fund. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. In addition, this Presentation contains “forward-looking statements.” Actual events or results or the actual performance of the fund may differ materially from those reflected or contemplated in such forward-looking statements.
None of Neuberger Berman Group LLC nor any of its affiliates have made any representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of any of the information contained herein (including but not limited to information obtained from third parties unrelated to Neuberger Berman Group LLC), and they expressly disclaim any responsibility or liability therefore. None of Neuberger Berman Group LLC nor any of its affiliates have any responsibility to update any of the information provided in this summary document.
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