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Equity Income

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Institutional Strategy > Equity > Equity Income

Equity Income

An all-cap active strategy with a focus on growth of capital, income generation and downside risk mitigation

  • Strategic allocation across REITs, Utilities, Convertibles and other high-yielding securities
  • Differentiated bottom-up approach to security selection focused on discounted free cash flow and net asset value
  • Senior portfolio managers average over 30 years of industry experience

Overview

Investment Philosophy

  • We avoid consensus thinking
  • Long-term value can be created by the companies we believe are attractively priced and poised to benefit from significant and underappreciated global trends
  • Opportunistic investment in non-U.S. companies seeks to improve the portfolio's risk/return profile
  • On-site company visits (globally) are a key component of the investment process and can meaningfully inform portfolio positioning
 

Investment Process

Employs a top-down identification of global secular growth trends/themes and a bottom-up approach to security selection focused on discounted free cash flow and net asset value

REITs, Convertibles, Utilities and Other Income Producing Securities

Universe: 60,000 Stocks

Quantitative Screening

600 Stocks
  • Fundamental Analysis
    1. Market Cap > $1 billion
    2. Daily Turnover > $5mm
    3. Dividend yield > S&P 500 Index
    4. Total debt < market cap
    5. FCF Yield > 5%

Detailed Analysis

150–300 Stocks
  • Fundamental Research
    - Meet with 800+ companies/year
    - Maintain models on 300+ companies
    - Discounted free cash flow analysis to avoid overpaying for stocks

Valuation, Risk Management

∼60–80 Stock Portfolio
  • Portfolio Construction
    - Valuation
    - Weighting determined
    - Risk management
    - Continuous monitoring
 

A Commitment to Risk Management

  • Asset class diversification
  • Income component has been shown to potentially dampen volatility
  • Typical individual security exposure of 2%, maximum of 6%
  • Automatic review if stock has dropped 20% from its cost

Management

Sandy Pomeroy
Senior Portfolio Manager
37 Years of industry experience
15 Years with Neuberger Berman
Richard S. Levine
Senior Portfolio Manager
41 Years of industry experience
31 Years with Neuberger Berman
William D. Hunter
Portfolio Manager
19 Years of industry experience
14 Years with Neuberger Berman
Shawn Trudeau, CFA
Associate Portfolio Manager
13 Years of industry experience
9 Years with Neuberger Berman