Anyone who still thinks of Neuberger Berman
as a mutual fund manager focused on uncovering just inexpensive stocks had better get current. At the start of June the New York City-based asset manager is taking the wraps off its first mutual fund of hedge funds. The fund's portfolio management team is also open to adding additional subadvisors mandates.
Neuberger's top brass discussed the launch of the Neuberger Berman Absolute Return Multi-Manager Fund
(ticker: NABAX, NABCX and NABIX) with MFWire
"We think it's the future of delivering alternative hedge fund strategies to clients," said managing director David Kupperman
. The advantages of wrapping alternatives strategies in a mutual fund include daily liquidity and low investment minimums for shareholders.
"The hedge fund environment has changed, where people have become a lot more educated about the '40 Act space," he added. "This is an opportunity that we see and do think is going to be very significant in the future, allowing people who have historically not been able to access alternatives access in vehicles that have a lot of benefit to them."
The fund was made available to wirehouses and RIAs on June 1.
The mutual fund is the first to be managed by members of Neuberger's Fund of Hedge Funds (FoHF) team. The team has mixed together a number of distinct alternative investment strategies from the eight subadvisors to build the fund.
Kupperman said Neuberger expects to add additional hedge fund managers of other strategies in the future, including at least one sometime this year. However, he stressed that selection of sub-advisors -- who are rated based on how well their return characteristics, liquidity and leverage fit into the 1940 Act -- is not a time sensitive process.
"We always want to find the manager who best fits the sleeve. Top down or bottoms up, we have to find the manager that we think is good and that we're very excited about including," Kupperman said.
The mutual fund's current sub-advisors include The Boston Company
for long/short and mid-cap equities; Cramer Rosenthal McGlynn
for global long/short equities; GAMCO Asset Management
for merger arbitrage; Levin Capital Strategies
for event driven investments; Sound Point Capital
for distressed and event-driven credit; Turner Investments
for long/short healthcare equity; and Visium Asset Management
for event-driven investments.
will also begin allocating long/short credit arbitrage assets to the fund when it has accrued around $125 million in assets.
NEW YORK, June 11, 2012 – Neuberger Berman Group LLC, one of the world’s leading employee-owned money managers, announced today the launch of Neuberger Berman Absolute Return Multi-Manager Fund (tickers: NABAX, NABCX, and NABIX) (the “Fund”). The Fund seeks capital appreciation with an emphasis on absolute returns by allocating its assets to multiple hedge fund advisers that employ distinct alternative investment strategies. TheFund is the first such fund from an asset manager with the size and operational infrastructure of Neuberger Berman.
The Fund is managed by members of the Neuberger Berman Fund of Hedge Funds (FoHF) team and is the first time this team’s expertise is offered in a mutual fund. Unlike traditional hedge funds, the Fund provides daily liquidity, lower investment minimums ($1,000 for Class A and C shares), will deliver 1099s to shareholders, offers full transparency of portfolio holdings and does not have a performance based management fee. Additionally, the Fund employs the risk management and monitoring, mix of managers and strategies, and operational due diligence previously available only to institutional and high-net-worth investors through traditional hedge funds. The Fund combines an experienced Hedge Fund of Funds team with a firm that has been providing mutual fund solutions for over 60 years.
The Fund is managed by a seasoned team with a 10-year track record of serving the needs of institutional and high net worth investors. The team includes Eric Weinstein, chief investment officer and managing director; Jeff Majit, managing director; Fred Ingham, managing director; David Kupperman, Ph.D., managing director; and Ian Haas, senior vice president.
David Kupperman said, “We are strong believers that alternative mutual fund solutions—‘liquid alternatives’—are applicable to investors who have historically not been able to access hedge fund strategies as well as institutions that seek liquid and cost-effective solutions. We see a future where defined contribution plans embrace alternative investments in providing 401(k) plan participants a full investment solution.”
The Fund’s sub-advisers are: The Boston Company for long/short and mid-cap equities; Cramer Rosenthal McGlynn for global long/short equities; GAMCO Asset Management for merger arbitrage; Levin Capital Strategies for event driven investments; Sound Point Capital for distressed and event driven credit; Turner Investments for long/short healthcare equity; and Visium Asset Management for event driven investments. The Fund has also hired MacKay Shields as a sub- adviser for long/short credit arbitrage and intends to begin allocating assets to this manager when the Fund has approximately $125 million in assets. The Fund expects to add additional highly skilled hedge fund managers in the future.
“We are very excited to launch a fund that will offer the liquidity and accessibility of a mutual fund and the underlying investments of hedge fund strategies, all with the goal of providing attractive returns for investors,” said Eric Weinstein, chief investment officer and managing director of NB Alternative Investment Management LLC. “The fund is a well-constructed portfolio of high quality managers. We believe alternative investments can play an important role alongside long-only equities and fixed income and we are delighted to offer these strategies in a mutual fund structure.”
The Neuberger Berman FoHF team that advises the Neuberger Berman Absolute Return Multi- Manager Fund currently provides discretionary and advisory services for institutional and hedge fund client’s assets in excess of $3B.
About Neuberger Berman
Neuberger Berman is a private, independent, employee-controlled investment manager. It partners with institutions, advisors and individuals throughout the world to customize solutions that address their needs for income, growth and capital preservation. With more than 1,700 professionals focused exclusively on asset management, it offers an investment culture of independent thinking. Founded in 1939, the company provides solutions across equities, fixed income, hedge funds and private equity, and had $199 billion in assets under management as of March 31, 2012. For more information, please visit our website at www.nb.com.
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