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A Message from our CEO
We are frequently approached by portfolio managers and investment teams seeking to bring their
careers to Neuberger Berman. We hire extremely few of these impressive, qualified professionals,
preferring to add judiciously to our base of 415 investment professionals. In fact, the most recent
senior portfolio manager whom we brought on board was Eli Salzmann, who joined the firm
in January of 2011 after a storied career at another firm. Eli is off to a terrific start and we have
entrusted him with additional assets and the management of one of our notable mutual funds.
Over the course of time, we expect to add prudently to our investment lineup based on client
needs and specific areas where we believe we can offer value.
We are first and foremost an asset manager with a single focus on
partnering with our clients to achieve their unique objectives.
neuberger berman annual review 2011
Ownership Structure
In 2011, we took a significant step forward in aligning the ownership structure of our firm with our
goals of investment excellence, client focus and independence. The employees of Neuberger Berman
reached agreement allowing us to purchase the remaining portion of the firm, a phased process slated
to begin in 2012 and conclude in 2017. I have been gratified by my colleagues’ overwhelming support
for this process. At their first opportunity to purchase additional equity, 50 of 50 top equity holders
elected to buy more. We have nearly 300 employee equity holders in the firm, and over a thousand
employees who participate in a profit-sharing plan. Our people understand what we are building.
The only thing better than a firm 100 percent owned by its active employees is one in the process
of advancing toward 100 percent ownership. We are affirming, every day, our vision for this firm’s
future and investing our own equity in that vision. Nothing could be a greater indication of the
confidence Neuberger Berman’s employees have in the future. The closing of this transaction, which
we anticipate later this year, will also allow us to execute a debt financing which will leave us with a
smaller total obligation and lower cost financing than our current capital structure.
These moves have further helped retain our most valuable assets, the investment management
talent that is the firm’s foundation. Our retention of portfolio managers at the Managing Director
level remains exceptionally high. Since our independence three years ago, we can proudly attest
that 95% of our Managing Director and Senior Vice President investment professionals together
with 96% of Managing Directors firm-wide have chosen to remain with the firm. Further, with
our senior portfolio managers’ experience averaging 26 years (a full 33% higher than the industry’s
average), it is significant to note that 90% of our clients’ assets are managed by lead portfolio
managers with more than 20 years of industry experience, and of whom more than 80% have
been with Neuberger Berman for more than ten years. 3 We believe stability and continuity are key
ingredients in generating alpha.
3. Industry averages are based on data reported to eVestment Alliance, which includes separate accounts, mutual funds,
and commingled funds. Includes all underlying portfolio managers’ industry experience reporting to eVestment Alliance as of
December 31, 2011. “Lead portfolio managers” are defined as those individuals who head the investment team.
AUM BY DISTRIBUTION CHANNEL as of 12/31/2011
49% Institutional
30% Intermediary
21% Individuals, Families and Their Charitable Organizations