Company Profiles

Neuberger Berman CEO Defends Its Portfolio Manager Model

Charles Paikert Family Wealth Report Editor New York 10 June 2010

Neuberger Berman CEO Defends Its Portfolio Manager Model

Neuberger Berman's chairman and chief executive George Walker says the firm's "portfolio manager-centric" and proprietary product approach to wealth management is part of its DNA as an asset manager.

George Walker, chairman and chief executive of Neuberger Berman, strongly defended his firm’s “portfolio manager-centric” style of wealth management in an exclusive interview with Family Wealth Report.

“That’s who we are,” Walker said. “At our core we’re an asset management firm with a far more portfolio management-centric relationship with our clients than our competitors.”

Asked about perceptions that the firm had a “star system” among portfolio managers that might lead some clients to not knowing what talent level they were getting, Walker said the criticism was unwarranted.

Neuberger Berman has two types of wealth management clients, Walker said.

The first tend to be very large families who have a long-standing relationship with one of the firm’s 40 portfolio management teams, he said. Those clients tend to know what kind of investment approach they want and have usually interviewed a number of the Neuberger teams before making a selection.

“They are here because of that team,” Walker said.

Other clients come to the firm without any preconceptions and want Neuberger to help them manager their money, he said. That relationship is managed by one of Neuberger’s 46 advisors in the US who have access to the portfolio management teams, trust company and other services.

“The wealth advisors make sure the clients are invested with the right teams,” Walker said.

Neuberger  has about $40 billion in assets under management for its high net worth wealth managment division. Clients must have at least $1 million in investable assets.

The Neuberger CEO also defended its reliance on proprietary products as part of its asset management DNA.

“Ninety per cent of client assets have outperformed benchmarks over the trailing five years,” Walker said. “People choose us because of our model and the reason they stay is because we deliver terrific performance over time.”

Neuberger, which is celebrating its first year as a private, independent company after being spun off from Lehman Brothers, does not have expansion plans in the US beyond its current 12 offices, Walker said.

“We were less aggressive about downsizing last year than our competitors,” he explained. “We are really focusing on client satisfaction and less focused on new offices.”

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