How has Neuberger Berman evolved since the 2009 management buy-out from Lehman Brothers?
Neuberger Berman is a private, employee -owned investment manager that dates back to 1939. For five years in that history we were owned by Lehman Brothers as its asset management division, which was kept quite separate [from its banking division], making the spin-out to independence in 2009 much easier. It taught us a lot about the importance of corporate structure.
Re-establishing the firm in a private setting was really important. It gave us an opportunity to start afresh in a way that was conducive to investment performance, to focus on what consultants and professional gatekeepers look for in an investment management firm.
Our clients are not too keen on change. The counterparties we work with spend a lot of time doing due diligence on the asset managers they partner with. It is really important therefore to make sure you have experienced personnel who work together well and stay with the firm.
Neuberger Berman now has more than 2,200 employees and is 100% owned by more than 400 partners.
An important element of being an independent partnership is that we can take the longer-term view. We do not have to worry about quarterly numbers. We see growth as a derivative of performance and client service. Therefore, the pressure is on generating performance and navigating these difficult markets. Neuberger Berman values independent thinking above all else. We have more than 40 investment teams across strategies who work together, but we do not invest by consensus.
Over the years, we have become a broader asset management firm, beyond our traditional New York business that was mostly US dollar-based and equity-focused. Now we have a diverse investment platform covering fixed income as well as alternatives, which is much more global in nature.
We made a notable addition to our range of capabilities three years ago, with an emerging market debt team. The team was made up of 22 people who we hired from ING to complete our fixed-income platform. When we add teams, we want to work with people who are experienced team players and, most importantly, great investors who are passionate about the job at hand.
How is your distribution strategy evolving as a pure investment house? Have you agreed any partnerships in the past year?
We are huge believers in a local-to-local model. So from day one in 2009, when we re-emerged as an independent company, we established our Europe, Middle East, Africa and Latin America headquarters in London before quickly setting up shop again in key markets across the region.
The first office we opened was in Switzerland, followed by Germany, the Netherlands, Italy, Argentina, United Arab Emirates, France, Colombia and, most recently, Spain.
When we move into a new region, we tend to start with a small office with one or two people, responding to client activity. We think, other than the cultural benefits of a local presence, there are also the regulatory benefits of having someone who understands the market.
Our approach is increasingly consultative, not just institutionally but with intermediary counterparties, moving towards broader client solutions, including more esoteric investment strategies. That is how our relationships have evolved with the large, global, private banks.
We also have funds on a wide range of distribution platforms and through international life companies, particularly as our fund range is becoming broader and more relevant to them.
