Neuberger Berman
Encyclopedia
Neuberger Berman Group LLC, through its subsidiaries is an investment management
firm that provides financial services
for high net worth individual
s and institutional investor
s. With approximately $200 billion in asset under management, it is among the largest private employee-controlled asset management firms in the world. The company's three primary businesses include wealth management
, mutual funds, and institutional asset management.
The firm manages equity, fixed income, and balanced separate accounts; no-load and load equity and fixed income closed and open ended mutual funds,including municipal bond funds, real estate funds, and hybrid funds, and alternative investments including hedge funds and private equity vehicles. The firm has largely been private owned for most of its existence and is currently among the largest employee-controlled asset management firm in the world, smaller than Fidelity Investments
, The Capital Group Companies
and Wellington Management Company
The company founded the "Neuberger Berman Foundation" which is committed to help at-risk children and youth achieve their potential through educational enrichment and support programs that promote academic success, independence and economic sustainability.
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 fund
s in the United States. Today, the firm’s complex of roughly 30 open and closed-end mutual funds, includes other well-known funds, including Century Fund (renamed Large Cap Disciplined Growth Fund) and Genesis Fund. 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
.
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 trust
s and high-yield investments. In addition, with the creation of several trust companies, the firm offered trust and fiduciary services.
After 60 years as a private firm, in October 1999, Neuberger 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. During this time, the firm embarked on a growth through acquisition strategy, including the Fasciano Fund, Executive Monetary Management, Oscar Capital Management, and the private asset management business of Delta Capital Management.
, began to diversify its business and aggressively re-entered the asset-management business, which it had exited in 1989. Beginning with $2 billion in assets under management, the firm acquired the Crossroads Group
and the fixed-income division of Lincoln Capital Management
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. That transaction closed in October 2003 and from that time, until 2008, Neuberger Berman served as the asset management arm of Lehman Brothers’ Investment Management Division. While owned by Lehman, the firm continued to grow and acquired other firms, including H.A Schupf & Co., and David J. Green & Co., LLC
in global securities markets resulted in Lehman Brothers
’ collapse and bankruptcy filing. Neuberger continued to operate, notwithstanding Lehman’s bankruptcy and sought opportunities to spin itself off from its parent.
On September 29, 2008, Lehman agreed to sell its asset management businesses, including Neuberger, to a pair of private-equity firms, Bain Capital Partners and Hellman & Friedman
, for $2.15 billion. The transaction was expected to close in early 2009; 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. The firm spun itself off in May 2009, and as a part of the deal, Lehman Brothers' creditors retain a 49% common equity interest in the firm. The new entity, including Neuberger, Lincoln Capital, and Crossroads, was named Neuberger Berman Group LLC. Under employee control, Larry Zicklin
rejoined the firm as a member of the Board of Directors.
"Why contemporary art? We believe that the challenge of investing is to always stay current, to cope with a new and ever-changing business environment. Art helps us look at the world with a fresh perspective."
The firm's corporate art collection was absorbed into the Lehman Brothers collection and currently has "about 900 works." More than two-thirds of those pieces were purchased by the firm from the bankrupt Lehman Estate, with the remaining pieces sold at auction in 2010.
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
firm that provides financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
for high net worth individual
High net worth individual
A high-net-worth individual is a person with a high net worth. In the private banking business, these individuals typically are defined as having investable assets in excess of US$1 million. As explained below, the U.S...
s and institutional investor
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
s. With approximately $200 billion in asset under management, it is among the largest private employee-controlled asset management firms in the world. The company's three primary businesses include wealth management
Wealth management
Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services...
, mutual funds, and institutional asset management.
Overview
Neuberger Berman is an asset management firm. The company provides investment management and financial planning, fiduciary services, and trust services to its clients. It provides its services to high net worth individuals, pension and profit sharing plans, banking and thrift institutions, investment companies, pooled investment vehicles, charitable organizations, corporations, and state and municipal government entities.The firm manages equity, fixed income, and balanced separate accounts; no-load and load equity and fixed income closed and open ended mutual funds,including municipal bond funds, real estate funds, and hybrid funds, and alternative investments including hedge funds and private equity vehicles. The firm has largely been private owned for most of its existence and is currently among the largest employee-controlled asset management firm in the world, smaller than Fidelity Investments
Fidelity Investments
FMR LLC or Fidelity Investments is an American multinational financial services corporation one of the largest mutual fund and financial services groups in the world. It was founded in 1946 and serves North American investors. Fidelity Ventures is its venture capital arm...
, The Capital Group Companies
The Capital Group Companies
The Capital Group Companies is one of the world’s largest investment management organizations with assets of around one trillion USD under management. It comprises a group of investment management companies, including Capital Research and Management, American Funds, Capital Bank and Trust, Capital...
and Wellington Management Company
Wellington Management Company
Wellington Management Company is one of the largest private, independent investment management companies in the world. The firm has client assets under management totalling over US$634 billion, and serves as investment advisor for over 1,900 institutional clients in over 50 countries. Assets are...
The company founded the "Neuberger Berman Foundation" which is committed to help at-risk children and youth achieve their potential through educational enrichment and support programs that promote academic success, independence and economic sustainability.
History
Neuberger Berman was originally founded as "Neuberger & Berman", in 1939, by Roy R. NeubergerRoy Neuberger
Roy Rothschild Neuberger was an American financier who contributed money to raise public awareness of modern art through his acquisition of pieces he deemed worthy. He was a co-founder of the investment firm Neuberger Berman....
and Robert Berman, to manage money for high-net-worth individuals
High net worth individual
A high-net-worth individual is a person with a high net worth. In the private banking business, these individuals typically are defined as having investable assets in excess of US$1 million. As explained below, the U.S...
.
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 fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
s in the United States. Today, the firm’s complex of roughly 30 open and closed-end mutual funds, includes other well-known funds, including Century Fund (renamed Large Cap Disciplined Growth Fund) and Genesis Fund. 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
CNA Financial Corporation
CNA Financial Corporation is a financial corporation based in Chicago, Illinois, United States, and noted for its tall red headquarters building, CNA Center. Its principal subsidiary, Continental Casualty Company was founded in 1897. CNA was incorporated in 1967...
.
Historically known for its value-investing
Value investing
Value investing is an investment paradigm that derives from the ideas on investment and speculation that Ben Graham and David Dodd began teaching at Columbia Business School in 1928 and subsequently developed in their 1934 text Security Analysis...
style, in the 1990s the firm began to diversify its competencies to include additional value and growth investments
Growth investing
Growth investing is a style of investment strategy. Those who follow this style, known as growth investors, invest in companies that exhibit signs of above-average growth, even if the share price appears expensive in terms of metrics such as price-to-earnings or price-to-book ratios...
, across the entire capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
spectrum, as well as new investment categories, such as international, real-estate investment trust
Real estate investment trust
A real estate investment trust or REIT is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors...
s and high-yield investments. In addition, with the creation of several trust companies, the firm offered trust and fiduciary services.
Initial Public Offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
of its shares and commenced trading on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
, under the ticker symbol "NEU". With the firm's IPO, Larry Zicklin
Larry Zicklin
Larry Zicklin is a former Chairman of the Board of investment management firm, Neuberger Berman. He is currently a Clinical Professor at Stern School of Business at New York University and teaches courses in Corporate Governance and the Management of a Financial Business at Stern...
, 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. During this time, the firm embarked on a growth through acquisition strategy, including the Fasciano Fund, Executive Monetary Management, Oscar Capital Management, and the private asset management business of Delta Capital Management.
Lehman Brothers acquisition and bankruptcy
In 2003, investment banking firm, Lehman BrothersLehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
, began to diversify its business and aggressively re-entered the asset-management business, which it had exited in 1989. Beginning with $2 billion in assets under management, the firm acquired the Crossroads Group
Crossroads Group
The Crossroads Group was a Dallas-based private equity fund of funds firm focusing on venture capital investments. The firm was founded in 1981 and acquired by Lehman Brothers in October 2003...
and the fixed-income division of Lincoln Capital Management
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. That transaction closed in October 2003 and from that time, until 2008, Neuberger Berman served as the asset management arm of Lehman Brothers’ Investment Management Division. While owned by Lehman, the firm continued to grow and acquired other firms, including H.A Schupf & Co., and David J. Green & Co., LLC
Management Buyout
On September 15, 2008, virtually unprecedented volatilityVolatility (finance)
In finance, volatility is a measure for variation of price of a financial instrument over time. Historic volatility is derived from time series of past market prices...
in global securities markets resulted in Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
’ collapse and bankruptcy filing. Neuberger continued to operate, notwithstanding Lehman’s bankruptcy and sought opportunities to spin itself off from its parent.
Hellman & Friedman
Hellman & Friedman is a private equity firm, founded in 1984 by Warren Hellman and Tully Friedman, that makes investments primarily through leveraged buyouts and minority growth capital investments....
, for $2.15 billion. The transaction was expected to close in early 2009; 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. The firm spun itself off in May 2009, and as a part of the deal, Lehman Brothers' creditors retain a 49% common equity interest in the firm. The new entity, including Neuberger, Lincoln Capital, and Crossroads, was named Neuberger Berman Group LLC. Under employee control, Larry Zicklin
Larry Zicklin
Larry Zicklin is a former Chairman of the Board of investment management firm, Neuberger Berman. He is currently a Clinical Professor at Stern School of Business at New York University and teaches courses in Corporate Governance and the Management of a Financial Business at Stern...
rejoined the firm as a member of the Board of Directors.
Offices
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 20 other offices in key cities around the world, including Amsterdam, Frankfurt, Hong Kong, London, Melbourne, Shanghai, Tokyo and Zurich. The firm has been in its current headquarters since consolidating its 522 Fifth Avenue and Madison Avenue locations in 1992.Corporate art collection
The company's web site states: 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. In 1990 the firm began developing its own art collection. 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. The collection creates a stimulating and enriching environment for both employees and visitors."Why contemporary art? We believe that the challenge of investing is to always stay current, to cope with a new and ever-changing business environment. Art helps us look at the world with a fresh perspective."
The firm's corporate art collection was absorbed into the Lehman Brothers collection and currently has "about 900 works." More than two-thirds of those pieces were purchased by the firm from the bankrupt Lehman Estate, with the remaining pieces sold at auction in 2010.
See also
- Lehman Brothers bankruptcy
- Larry ZicklinLarry ZicklinLarry Zicklin is a former Chairman of the Board of investment management firm, Neuberger Berman. He is currently a Clinical Professor at Stern School of Business at New York University and teaches courses in Corporate Governance and the Management of a Financial Business at Stern...