Contents

Overview [ edit ]

Founded in 1939, [ 2 ] Neuberger Berman is a privately held asset management firm, which is 100% [ 3 ] [ 4 ] owned by its employees. The company provides investment management and financial planning, fiduciary services, and trust services to its clients. It serves pension plans, charitable organizations, sovereign wealth funds and other institutions, as well as high-net-worth individuals and mutual fund investors, both directly and through financial intermediaries and other partners. Neuberger Berman was named by Pensions & Investments a Best Place to Work in Money Management in both 2013 and 2014. [ 5 ] [ 6 ]

The firm has a broad range of investment capabilities, including: equity strategies spanning the global market capitalization and style spectrum, fixed income strategies across investment grade, non-investment grade, emerging markets, global, specialty, tax-exempt, and cash/short duration; alternative investments, including private equity and hedge funds strategies; and multi-asset class strategic solutions for large institutions.

The firm’s broad capabilities have enabled it to win numerous public strategic partnership mandates, most notably from Teacher Retirement System of Texas and the National Social Security Fund of China. [ 7 ]

History [ edit ]

Neuberger Berman was originally founded as Neuberger & Berman, in 1939, by Roy R. Neuberger and Robert Berman, to manage money for high-net-worth individuals .

In the decades that followed its founding, the firm’s growth mirrored that of the asset-management industry as a whole. Its success in managing separate accounts, led it to establish the Guardian Fund, in 1950, one of the first no-load mutual funds in the United States. Today, the firm’s complex of roughly 40 open and closed-end mutual funds, includes other well-known funds, including Century Fund (renamed Large Cap Disciplined Growth Fund) and Genesis Fund. [ 8 ] In the 1960s, the firm expanded into the management of pension plans and assets of other institutions. In 1979, the firm acquired the Manhattan Fund, from CNA Financial. [ 9 ]

Historically known for its value-investing style, in the 1990s the firm began to diversify its competencies to include additional value and growth investments. across the entire capitalization spectrum, as well as new investment categories, such as international, real-estate investment trusts and high-yield investments. In addition, with the creation of several trust companies, the firm offered trust and fiduciary services.

Initial Public Offering [ edit ]

Pre-Lehman bankruptcy logo

After 60 years as a private firm, in October 1999, Neuberger Berman conducted an initial public offering of its shares and commenced trading on the New York Stock Exchange. under the ticker symbol NEU. With the firm’s IPO, Larry Zicklin. who had joined the firm in 1969, retired as Chairman of its executive committee. He was succeeded as Chief Executive Officer by Jeffrey B. Lane, a former Vice Chairman of Travelers Group who had joined the firm in 1998 as Chief Administrative Officer. [ 10 ] After this the firm embarked on a growth path by acquiring the Fasciano Fund, [ 11 ] Executive Monetary Management, [ 12 ] Oscar Capital Management, [ 13 ] and the private asset management business of Delta Capital Management, [ 14 ]

Lehman Brothers acquisition and bankruptcy [ edit ]

In 2003, investment banking firm, Lehman Brothers. began to diversify its business and aggressively re-entered the asset-management business, which it had exited in 1989. [ 15 ] Beginning with $2 billion in assets under management, the firm acquired the Crossroads Group and the fixed-income division of Lincoln Capital Management. [ 15 ]

In July 2003, shortly after the retired Mr. Neuberger’s 100th birthday, the company announced that it was in merger discussions with Lehman Brothers. These discussions ultimately resulted in the firm’s acquisition by Lehman on October 31, 2003, for approximately $2.63 billion in cash and securities, or approximately 26 times earnings. [ 16 ] That transaction closed in October 2003 and from that time, until 2008, Neuberger Berman served as one of the asset management arms of Lehman Brothers’ Investment Management Division. While owned by Lehman, the firm continued to grow and acquired other firms, including Sloate, Weisman, Murray and Company, H.A Schupf & Co. and David J. Green & Co. LLC. [ 17 ] [ 18 ] [ 19 ]

Management Buyout [ edit ]

On September 15, 2008, virtually unprecedented volatility in global securities markets resulted in Lehman Brothers ’ collapse and bankruptcy filing. Neuberger Berman continued to operate, notwithstanding Lehman’s bankruptcy and sought opportunities to spin itself off from its parent.

New York City headquarters on Third Avenue .

On September 29, 2008, Lehman agreed to sell its asset management businesses, including Neuberger Berman, to a pair of private-equity firms, Bain Capital Partners and Hellman & Friedman. The transaction was expected to close in early 2009; [ 20 ] however, a competing bid was entered by the firm’s management, who ultimately prevailed in a bankruptcy auction held on December 3, scuttling the deal with Bain and Hellman. [ 21 ]

The firm spun itself off in May 2009, in a transaction recognized by Fund Industry Intelligence as Deal of the Year. [ 22 ] Lehman Brothers’ creditors initially retained a 49% common equity interest in the firm and a $875 million preferred equity stake. [ 21 ] with a coupon that climbed to 10% over three years. The preferred equity position has also been fully repaid. [ 23 ] The new entity, including Neuberger, Lincoln Capital, and Crossroads, was named Neuberger Berman Group LLC. [ 24 ] Under employee control, Larry Zicklin rejoined the firm as a member of the Board of Directors. Lehman Brothers creditors have received over $1.5 billion from the employees of Neuberger Berman, dwarfing the proceeds paid by Barclays and Nomura for businesses representing 90% of Lehman Brothers employees. [ 25 ]

Since 2009 [ edit ]

Since its reemergence as an independent firm, Neuberger Berman has selectively added to its investment capabilities, most notably with the acquisition of a 23-person Emerging Markets Debt team in 2013. [ 26 ] Other signal developments include the additions of large-cap value portfolio manager Eli Salzmann, [ 27 ] private debt investor Susan Kasser [ 28 ] and global fixed income portfolio manager Jon Jonsson. [ 29 ] At the same time, the firm has gradually expanded its global presence, strengthening regional headquarters in Hong Kong, London and Tokyo, and adding to investment and support personnel to service an increasingly global client base. [ 30 ]

Offices [ edit ]

The firm is headquartered in the Neuberger Building. located at 605 Third Avenue in New York City, an Emery Roth and Sons designed building, built by Fisher Brothers. In addition, the firm has approximately 16 other offices in key countries around the world. Regional headquarters are in Hong Kong, London and Tokyo, and has additional primary portfolio management centers in Atlanta, Chicago, Dallas, The Hague and Singapore. [ 31 ] The firm has been in its current headquarters since consolidating its 522 Fifth Avenue and Madison Avenue locations in 1992.

In May 2014, the company announced that it will move its headquarters to Vornado Realty Trust’s tower at 1290 Avenue of the Americas in midtown Manhattan. The move is scheduled for late 2016. [ 32 ]

Philanthropy [ edit ]

Collectively, Neuberger Berman’s philanthropic efforts are called NB Impacts. NB Impacts includes both employee community service and the grant-making actions of the Neuberger Berman Foundation. [ 33 ] The Neuberger Berman Foundation offers grants focusing on at-risk children, youth educational programs, and economic sustainability. [ 34 ] [ 35 ] [ 36 ] [ 37 ]

Neuberger Berman conducts an annual week-long program in the spring called “Celebration with Service,” which holds community service events in the cities where the firm has offices. [ 33 ] [ 38 ] [ 39 ] For its 75th anniversary year in 2014, the firm’s “Celebration with Service” supported 75 volunteer projects worldwide. [ 33 ] Since 2012, NB Impacts has deployed more than 4,500 volunteers to work with over 5,000 youth and 800 senior citizens, and also includes approximately 2,000 volunteer hours spent on improving parks and community spaces. [ 33 ] [ 40 ] Through the years, some of the programs Neuberger Berman has been involved in are: The Y, [ 41 ] Homes for Heroes, [ 42 ] Per Scholas, [ 43 ] C-CAP, [ 44 ] New York City Service, [ 45 ] [ 46 ] and Habitat for Humanity. [ 47 ]

Corporate art collection [ edit ]

Contemporary art in the workplace has been part of Neuberger Berman’s corporate culture since 1939, when renowned collector Roy Neuberger co-founded the investment firm. [ 48 ] In 1990 the firm began developing its own art collection. [ 49 ] [ 50 ] The firm’s corporate art collection was absorbed into the Lehman Brothers collection but Neuberger Berman repurchased many of them when the collection was sold at auction in 2010. [ 51 ] Today, the Neuberger Berman Collection supports the work of contemporary artists, prominently displaying their work in the firm’s hallways, reception areas and meeting rooms. [ 48 ] The collection creates a stimulating and enriching environment for both employees and visitors.