US asset manager Neuberger Berman is seeking to establish an Asian fixed income presence in the region as part of a broader expansion of its investment capabilities globally.
On the fixed income side, Neuberger Berman has 120 investment professionals worldwide, with Asian fixed income presently covered by its 12-strong investment team based out of London. That is out of a total of 400 portfolio managers and analysts globally and 1,700 staff in total.
Global high-yield and global investment grade make up the majority of the fixed income product it distributes in Asia currently.
Nick Hoar, Neuberger Berman’s Asia-Pacific head, tells AsianInvestor: “Asian fixed income is something we are looking at right now. We have been considering broadening our fixed income capabilities globally and there is definitely now a desire to build this [Asian] offering.”
He agrees that fixed income globally is an asset class in vogue, especially on the corporate credit side given the prolonged low interest-rate environment (the firm’s view is the US Federal Reserve won’t start raising rates until 2014).
Asked how long Neuberger Berman had been discussing the need for a fixed income team to be based in Asia, Hoar replies: “For us this is a 2012 initiative.”
However, he confirms that the launch of an Asian fixed income product will only happen once a dedicated team is in place in Asia.
Hoar adds that when it recognises a need to add capabilities, typically the firm hires external talent. He concedes the market for fixed income professionals in Asia is highly competitive, but stresses his preference for finding talent in this region before exploring overseas options.
He points to culture as being key at Neuberger Berman, adding: “Firms out there with no culture or clear leadership will see turnover start to creep up and it will be very difficult for them to rebuild.”
Neuberger Berman is an employee-controlled firm comprising 41 investment teams across equities, fixed income and alternatives. Its CIO is based in New York and it has an investment committee, although no coordinated house view that its teams are asked to adhere to.
Of the firm’s $205 billion in global assets under management, an estimated $5 billion (2.4%) is sourced from clients in Asia-Pacific. Of its total asset base, a third is accounted for by private banks in the US and two thirds by institutional clients (of which half are intermediaries).
“The plan here in Asia is to continue to build out our institutional client base, from China to Hong Kong to Southeast Asia to Australia,” confirms Hoar.
Neuberger Berman recently hired Mark Serocold in Hong Kong and Vincent Lim in Singapore to drive business development across the region, in news broken by AsianInvestor.
It is also due to announce the appointment of Rebecca Schrage as vice-president of client services in Hong Kong, and Jonny Wong as senior vice-president and country head for Taiwan.
Schrage previously worked at AllianceBernstein, where she was responsible for institutional client servicing in Hong Kong and New Zealand. She began her career at Morgan Stanley in New York.
Meanwhile Wong will be responsible for Neuberger Berman’s sales activities in Taiwan. Formerly he worked at UBS Global Asset Management as general manager in Taiwan.
At present Neuberger Berman employs about 50 people in Asia-Pacific (excluding Japan and Korea), comprising 30 in Hong Kong, 10 in Shanghai and the remainder in Singapore and Melbourne.
This year the firm was awarded a $100 million QFII quota from the State Administration of Foreign Exchange, and Hoar says this will be used entirely on slotting A-share exposure into existing strategies. “We manage Greater China, and having A-share exposure rounds out our offering,” he notes.
Neuberger Berman runs over $1.5 billion in Chinese equities (mid-cap bias) for sovereign wealth funds, pension funds and intermediaries. Equity research is carried out by its 10-strong Shanghai team led by Frank Yao, while portfolio management and trading is done out of Hong Kong.