Executives at Neuberger Berman are dusting off their suit jackets from last Fall's implosion of Lehman Brothers and refocusing on fundamentals. The New York City-based asset manager took an initial step in the initiative on Wednesday through a "meet-and-great" lunch between a dozen-and-a-half reporters and key members of its portfolio management teams.
"Since September we have had the unique experience of operating as part of a bankrupt entity; we are thrilled to be private ..." explained George Walker
, CEO of Neuberger Berman. Earlier, Walker told reporters that "We are fortunate to be back to our roots."
In a follow-on interview with MFWire
, Walker emphasized that being independent would allow Neuberger to take a long term view and focus on creating alpha for its clients rather than chasing product trends or meeting the expectations of a larger parent organization.
"When we were part of Lehman, the expectation was that we would look like Lehman," Walker explained. Those expectations included meeting firmwide growth targets ahead of other metrics.
Going forward Walker said that Neuberger will be focused on adding alpha.
"That is not something that is easy to do," he admitted, before pointing out that the firm's new structure can provide an advantage in meeting this objective.
Walker sees the ability to create alpha as arising from strong and experienced investment management teams. Being a part of a management-owned business can incent those teams to stick together as they have both creative freedom and a stake in the business.
He also pointed out that Neuberger has no debt and is majority owned by "the people in this room."
Walker is already seeing the fruits of that appeal.
"We have been getting resumes from other shops from people who appreciate the opportunity," Walker confided. However, he added that Neuberger is not now planning to hire and that he will let the new Neuberger take some time to gel before focusing on growing its ranks.
Portfolio managers at the event agree that the new structure is liberating after the events at Lehman.
"There is a lot of excitement that we are private again," said Charles Kantor
, a managing director and portfolio manager who works with Neuberger's high net worth clients.
"The entrepreneurial spirit is very important," agreed Janet Fiorenza
, a managing director in charge of Neuberger's municipal bond team. She pointed out that she has brought together many of the portfolio professionals she worked with at Weiss Peck & Greer before she joined Neuberger in 2005.
, chief investment officer for equity at Neuberger, claims that Neuberger's investment professionals have more than experience on their side in their quest to add alpha, pointing out that Neuberger's heft and strong reputation provide it "incredible access" to CEOs and top management at the companies it invests in.
More than 2,000 companies visit Neuberger annually, she noted.
"The team attracts management visits," seconded Bob D'Alelio
, co-portfolio manager of the small cap equity team of Neuberger Berman. "We don't buy stocks loved by Wall Street analysts," he explained. Rather, he is seeking companies that are unleveraged and are not dependent on Wall Street financing. That Neuberger's reputation attracts visits provides his fund an edge in his opinion.
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