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| Type | Private |
|---|---|
| Founded | New York, NY (1939) |
| Headquarters | New York City |
| Key people | George Herbert Walker IV Chief Executive Officer |
| Industry | Financial Services |
| Products | Investment management Mutual funds |
| Total assets | $170 billion |
| Employees | 1,600 (2009) |
| 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. The company's three primary businesses include; wealth management, mutual funds, and institutional asset management.
Neuberger Berman was founded in 1939 and is based in New York City. From 2003 to 2008, Neuberger Berman served as the asset management arm of Lehman Brothers. Following the bankruptcy of Lehman Brothers, Neuberger Berman was sold to its management on December 3, 2008 as part of the liquidation process. The creditors of Lehman Brothers Holdings Inc. retain a 49% common equity interest in the firm.[1] The new entity is called Neuberger Berman Group LLC., and known simply as Neuberger Berman.[2]
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History
Neuberger Berman was founded in 1939 by Roy R. Neuberger and Robert Berman, to manage money for high-net-worth individuals.
In the decades that followed, the firm's growth mirrored that of the asset-management industry as a whole. In 1950, it introduced one of the first no-load mutual funds in the United States, the Guardian Mutual Fund (still operating as of 2009), and also began to manage the assets of pension plans and other institutions.
Historically known for its value-investing style, in the 1990s the firm began to diversify its competencies to include additional value and growth investing, 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 a nationally and several state-chartered trust companies, the firm became able to offer trust and fiduciary services. Today the firm has approximately $130 billion in assets under management.
IPO and Lehman Brothers merger
In October 1999, the firm conducted an initial public offering of its shares and commenced trading on the New York Stock Exchange, under the ticker symbol "NEU". In July 2003, shortly after the retired Mr. Neuberger's 100th birthday, the company announced that it was in merger discussions with Lehman Brothers Holdings Inc. These discussions ultimately resulted in the firm's acquisition by Lehman on October 31, 2003, for approximately $2.63 billion in cash and securities [3].
On November 20, 2006, Lehman announced its Neuberger Berman subsidiary would acquire H.A. Schupf & Co., a money-management firm targeted at wealthy individuals. Its $2.5 billion of assets would join Neuberger's $50 billion in high-net-worth client assets under management.[4]
Lehman bankruptcy
An article in the The Wall Street Journal on September 15, 2008, announcing that Lehman Brothers Holdings filed for Chapter 11 bankruptcy protection, quoted Lehman officials regarding Neuberger Berman: "Neuberger Berman LLC and Lehman Brothers Asset Management will continue to conduct business as usual and will not be subject to the bankruptcy case of the parent company, and its portfolio management, research and operating functions remain intact. In addition, fully paid securities of customers of Neuberger Berman are segregated from the assets of Lehman Brothers and aren't subject to the claims of Lehman Brothers Holdings' creditors, Lehman said." Original WSJ article here
Just before the collapse of Lehman Brothers, executives at Neuberger Berman sent e-mail memos suggesting, among other things, that the Lehman Brothers' top people forgo multi-million dollar bonuses to "send a strong message to both employees and investors that management is not shirking accountability for recent performance."
Lehman Brothers Investment Management Director George Herbert Walker IV, second cousin to then-U. S. President George Walker Bush, dismissed the proposal, going so far as to actually apologize to other members of the Lehman Brothers executive committee for the idea of bonus reduction having been suggested. He wrote, "Sorry team. I am not sure what's in the water at Neuberger Berman. I'm embarrassed and I apologize." [2]
On September 29, 2008, Lehman agreed to sell Neuberger Berman 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, subject to approval by the U. S. Bankruptcy Court, [5] however, a competing bid was entered by the firm's management, who ultimately prevailed in a bankruptcy auction, held on December 3, which scuttled the deal with Bain and Hellman. [1]
Offices
The firm is headquartered at 605 Third Avenue in New York City, with offices throughout the U.S. and around the world. 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." [6].
The firm's corporate art collection was absorbed into the Lehman Brothers collection and currently has "about 900 works" [7]. As a part of the Lehman Brothers estate, the future of the art collection is uncertain.
Funds
The firm is also well know for its family of mutual of funds, including its flagship, Guardian Fund, considered to be one of the first no load mutual funds in the United States. Other well known fund names include Century Fund (renamed Large Cap Disciplined Growth Fund) and Genesis Fund (Inception: Sept. 1988) [8].
References
- ^ a b http://www.nytimes.com/2008/12/04/business/04lehman.html Managers Win Auction for a Part of Lehman
- ^ https://www.nb.com/MYP/NB/PUB/24771/NSP/C/H/B/Q/SplashPage.html?userId=3U37Lqa1240953042000
- ^ at which time Larry Zicklin, who had joined the firm in 1969, retired as Chairman of the firm's executive committee
- ^ " Lehman to acquire H.A. Schupf" Reuters, November 20, 2006
- ^ [1] Neuberger Berman sold for $2.15B, September 29, 2008
- ^ 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
- ^ http://www.bloomberg.com/apps/news?pid=20601088&refer=home&sid=a4BqiycH4C_s, which quoted Arthur Goldberg, an art collector and now-retired partner at Neuberger, who was in charge of the company's art purchases from 1990 to 1998 as saying: "My hope is that the collection will continue... But my pragmatic feeling is that whoever acquires Neuberger and Lehman will look at the thing as an asset and not as art."
- ^ http://moneycentral.msn.com/detail/stock_quote?Symbol=NBGNX
See also
- Bankruptcy_of_Lehman_Brothers#Neuberger Berman
- Larry Zicklin
- [nb.com Official Web Site]
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