Neuberger Berman

Neuberger Berman Group LLC

Type	Private
Industry	Financial Services
Founded	New York, NY (1939)
Headquarters	New York City
Key people	George Herbert Walker IV Chief Executive Officer
Products	Investment management Mutual funds Equities Fixed income Alternative investments
AUM	$200 billion
Employees	1,700 (2011)
Website	www.nb.com

Neuberger Berman Group LLC, through its subsidiaries is an investment management firm that provides financial services for high net worth individuals and institutional investors. 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.

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, The Capital Group Companies and Wellington Management Company

History

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 30 open and closed-end mutual funds, includes other well-known funds, including Century Fund (renamed Large Cap Disciplined Growth Fund) and Genesis Fund.^[1] 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.^[2]

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

Pre-Lehman bankruptcy logo

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.^[3] During this time, the firm embarked on a growth through acquisition strategy, including the Fasciano Fund,^[4] Executive Monetary Management,^[5] Oscar Capital Management,^[6] and the private asset management business of Delta Capital Management.^[7]

Lehman Brothers acquisition and bankruptcy

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.^[8] Beginning with $2 billion in assets under management, the firm acquired the Crossroads Group and the fixed-income division of Lincoln Capital Management^[8]

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.^[9] 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.,^[10] and David J. Green & Co., LLC ^[11]

Management Buyout

On September 15, 2008, virtually unprecedented volatility 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.

New York City headquarters on Third Avenue.

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;^[12] 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.^[13] 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.^[13] The new entity, including Neuberger, Lincoln Capital, and Crossroads, was named Neuberger Berman Group LLC.^[14] Under employee control, Larry Zicklin 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.^[15] 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."^[16]

The firm's corporate art collection was absorbed into the Lehman Brothers collection and currently has "about 900 works."^[17] 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 Zicklin

References

1. ^ http://moneycentral.msn.com/detail/stock_quote?Symbol=NBGNX
2. ^ Funding Universe
3. ^ Law.com Lehman Brothers/Neuberger Berman
4. ^ Neuberger Berman to Acquire Investment Advisor to Small-Cap Blend Fund; Fasciano Fund Will Expand Neuberger Berman's Mutual Fund Offerings
5. ^ Neuberger Berman to Acquire Executive Monetary Management
6. ^ Highbeam: PR Newswire
7. ^ Neuberger Berman to Acquire Private Asset Management Business From Delta Capital Management
8. ^ ^{a b} "BACK AGAIN: Lehman returns to institutional management with Lincoln deal; Purchase of fixed-income business ends 13-year absence.(News: Lehman Brothers, Lincoln Capital Management Co.)". http://findarticles.com/p/articles/mi_hb5266/is_200212/ai_n20444216. Retrieved 2008-09-14. ^{[dead link]}
9. ^ Thomas, Landon Jr. (2003-07-23). "Market Place; Lehman to Buy Neuberger Berman For $2.6 Billion". NYTimes.com. http://query.nytimes.com/gst/fullpage.html?res=9507EFDB143FF930A15754C0A9659C8B63. Retrieved 2008-08-30. 
10. ^ Neuberger Berman Inc Acquires HA Schupf Co
11. ^ Neuberger Berman Intrinsic Value A
12. ^ Neuberger Berman sold for $2.15B, September 29, 2008
13. ^ ^{a b} http://www.nytimes.com/2008/12/04/business/04lehman.html Managers Win Auction for a Part of Lehman
14. ^ https://www.nb.com/MYP/NB/PUB/24771/NSP/C/H/B/Q/SplashPage.html?userId=3U37Lqa1240953042000
15. ^ www.nb.com contact information
16. ^ http://www.nb.com/MYP/NB/PUB/16485/NFA/D/0/Z/7/doc/E0190alPAM01.pdf, and quoted/paraphrased at http://www.tfaoi.com/aa/4aa/4aa282.htm
17. ^ Pollock, Lindsey (18 September 2008). "Hirst May Exit Corner Office as Lehman Mulls Collection's Fate". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601088&refer=home&sid=a4BqiycH4C_s. Retrieved 27 April 2010. 

External links

• Official Web Site