neuberger berman us long short equity fund - beconim berman/equity... · 2018. 11. 9. · global,...

For Professional Client Use Only

Neuberger Berman US Long Short Equity Fund September 2018

Employee-Owned Investment Manager

Partnering with clients to achieve their unique objectives

Alignment of Interests

Portfolio managers invest alongside clients

Breadth of Independent Perspectives

600 investment professionals connected across public and

private markets, equity, fixed income and alternatives

Experienced and Stable Teams

25+ year average industry experience for lead PMs; 96%

annualized retention rate of senior investment professionals at MD

and SVP level since becoming an independent company in 2009

Innovative Investment Solutions

A track record of client partnerships and long-term performance

Deep Resources

Extensive fundamental research, access to management,

innovative ESG research, and sophisticated risk management

1. Institutional-oriented equity and fixed income assets under management (“AUM”) includes the firm’s equity and fixed income institutional separate account (“ISA”), registered fund, and managed account/wrap (“MAG”) offerings and are based on the overall performance of each individual investment offering against its respective benchmark. High net worth/private asset management (“HNW”) AUM is excluded. If HNW AUM were included, the percentage of AUM outperforming the benchmark since inception period would have been 86% for equities and 94% for fixed income. Equity and Fixed Income AUM outperformance results are asset-weighted so individual offerings with the largest amount of assets under management have the largest impact on the results. Please see additional disclosures for important information regarding Private Equity methodology. All performance data for NB Private Equity funds, private equity indices data is as of March 31, 2018. Results are shown gross of fees. Individual offerings may have experienced negative performance during certain periods of time. See Additional Disclosures for additional information regarding the outperformance statistics shown (including 3-, 5- and 10-yr statistics for institutional-oriented equity and fixed income). Indexes are unmanaged and are not available for direct investment. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.

Long-term Outperformance1

87%Institutional-oriented equity

Percentage of institutional-oriented AUM outperforming

benchmark since inception ended September 30, 2018

95%Institutional-oriented fixed income

Percentage of institutional-oriented AUM outperforming

benchmark since inception ended September 30, 2018

73%

Private equity

Percentage of NB Private Equity funds raised between

2005 – 2016 (since inception performance)

outperforming benchmark Net IRR

2

Employee Ownership Fosters Team Stability and Alignment with Clients

Industry-leading experience, retention and culture

1. Employee assets include current and former employees and their family members.

of clients’ assets managed by

lead PMs who have 20+ years

of industry experience

Manager Experience

Retention Levels For Senior Investment Professionals

Managing Directors

(includes retirements)

Managing Directors

(competitor departures only)

98%

98%

99%

91%

94%

100%

99%

100%

99%

100%

2013

2014

2015

2016

2017

93%

Alignment With Clients

invested by Neuberger Berman employees

alongside clients1~$3bn100%independent,

employee-owned

Ownership Structure

deferred cash compensation directly linked to team

and firm strategies100%

Our Culture

2013 2014 2015

2016 2017

3

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi4nP-UvfrLAhXCJh4KHTelByYQjRwIBw&url=https://www.trsretire.com/industry_awards.jsp&bvm=bv.118443451,d.dmo&psig=AFQjCNFS3swgy264EL-T9uAUy7LzUMo8Og&ust=1460048075527346

Investment Platform

Breadth of independent perspectives across asset classes

1. As of September 30, 2018. Firm assets under management (AUM) includes $106.2 billion in Equity assets, $135.4 billion in Fixed Income assets and $73.9 billion in Alternatives assets. Alternatives “AUM and Committed Capital” includes assets under management for non-Private Equity businesses and Committed Capital since inception for the Private Equity businesses. Committed Capital since inception reflects all contractual commitments, including those still in documentation, to fund investments, including those which have since been realized, advised by NB Alternatives Advisers LLC and its affiliates or predecessors (the oldest mandate of which was founded in 1981).

EQUITY FIXED INCOME ALTERNATIVES

AUM $315bn1

Investment

Professionals

$106bn

225

$135bn

179

Risk Parity

Global Tactical Asset Allocation

Global Relative & Absolute Return

Income Focused

Inflation Management

Liability Aware

$82bn AUM and Committed Capital

152

Quantitative Global

U.S.

Emerging Markets

Custom Beta

Risk Premia

Options

Global Macro

Commodities

Fundamental Global Investment Grade

Global Non-Investment Grade

Emerging Markets, Regional EM, China

Multi-Sector, Opportunistic

Municipals

Specialty Strategies

– CLO Mezzanine

– Currency

– Corporate Hybrids

Private Equity:

– Primaries

– Co-Investments

– Secondaries

– Specialty Strategies– Minority stakes in

alternative firms - Dyal

Alternative Credit:

– Private Credit

– Residential Loans

– Special Situations

Hedge Funds:

– Multi-Manager

– Equity Long/Short

– Credit Long/Short

– Event Driven

QuantitativeFundamental

MULTI-ASSET CLASS SOLUTIONS AND STRATEGIC PARTNERSHIPS

Integration of Environmental, Social and Governance Factors

Global, EAFE

U.S. Value, Core, Growth

Emerging Markets

Regional EM, China

Global Thematic, Disruptive Themes

Sustainable Equity

Income Strategies

– MLP

– REITs

4

For Investment Professionals, Broker-Dealer and Institutional Use Only. Not for use with or distribution to the general public.

Proven Investment Strategy

1. Source: Neuberger Berman, as of June 30, 2018.

20082000 2011 2014 Today

Charles Kantor

joins Neuberger

Berman

US$3.4 billion

strategy1

US Mutual Fund

Vehicle Launched

UCITS Vehicle

Launched

Establishment and

launch of Long Short

Equity Strategy

Tech

Bubble

Global

Financial

Crisis

Eurozone

Debt

Crisis

China Stock

Market

Crash

Oil

Shock BREXIT

History of Long Short Equity Strategy

Unconstrained by market cap,

sector or style

Long-biased – typical net

exposure: 30-60%

Diversified portfolio with

50+ longs and 20+ shorts

~50% of equity market volatility/

~0.4 beta to equities

Fundamentally driven

long short strategy

Daily liquidity;

no performance fee

Key Investment Principles

For Professional Client Use Only5


Experienced long-short team supported by the breadth of Neuberger Berman

Portfolio Management Team

Name Title Yrs. of Industry Exp.

Charles C. Kantor Senior Portfolio Manager, Managing Director 25

Marc Regenbaum Associate Portfolio Manager, Consumer and Utilities 18

Raman Gambhir Senior Research Analyst – Credit, Telecommunications & Media 15

Charles Nguyen, CFA Senior Research Analyst – Healthcare and Technology 17

Ralph DeFeo, CFA, CPA Senior Research Analyst – Financials and Energy 17

Frank Bisk Research Analyst – Industrials 17

Amy Norflus Research Analyst – Technology 26

Kelly McMahon Portfolio Specialist 13

Note: Staffing is subject to change without notice. 1. As of June 30, 2018. 41 Research Analysts and Associates in total.

An Investment Team within a Global Firm

A Global Investment Organization

Global Trading Desk

• Centralized trading desk with fully automated global electronic platform

• 24/7 access to more than 70+ equity markets and 80 execution counterparties

Risk Oversight and Portfolio Analysis

• 25+ member risk management team

• Charged with identifying and mitigating investment and operational risk

Health Care

3 Analysts

Other

8 Analysts

Energy & Utilities

4 Analysts

Financial Services

6 Analysts

Technology, Media & Telecom

9 Analysts

Industrials & Materials

7 Analysts

Centralized Global Equity Research Department1

Consumer

4 Analysts



Disciplined Investment Process

Seeking attractive risk adjusted returns through fundamental analysis

This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman.

Philosophy Idea Generation

• Business Attributes

• Company Management

• Valuations

• ESG

• Longs: long-term fundamental

approach

• Shorts: Shorter term ‘catalyst

driven’ ideas

• Diversified longs and shorts

• Market hedges

• Macro-Aware

• Absolute return framework

• Risk adjusted returns

• Economic vs. Accounting

profits

Fundamental Research Portfolio Construction



Investment Philosophy and Approach

Determine if a company’s expectations of future growth reflects fair value by applying Economic

Value Analysis (“EVA”)

Capital

Invested

Value of

Current

Operations

Annual growth

in cash flows

Total

Enterprise

Value

Value of Future Growth

1. Encourages a private-equity like approach

2. Informs our view of the CEO as the chief investment officer - tasked with the essential choices for deploying capital

3. Quantifies firm value through an economic relationship rather than traditional accounting measures of corporate profit

4. Promotes an active dialogue with management teams

5. Differentiates our mindset versus traditional fundamental security analysis

This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

LOOKING BACKWARD • Review the market’s view of the

company’s future growth potential

• Examine changes in this view over the

past five years

• Determine whether we agree

with consensus

LOOKING FORWARD • Understand key drivers to model

• Return on invested capital

• Cost of capital

• Revenue growth

• EBIT margin

• Reinvestment rate

Assessing the Value of Future Growth

How “EVA” Guides Our Investing Approach:



This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

Idea Generation

MARKET

FIXED INCOME

CAPITAL GROWTH

Companies that demonstrate

attractive industry fundamentals,

strong competitive positions and

attractive re-investment opportunities

MANAGE SYSTEMATIC

EXPOSURES

• Market Capitalization Shorts

• Sector Shorts

• Geography Shorts

SEEK ALPHA

• Catalyst Driven

• Potential Earnings Miss

• Changing Competitive Environment

• Thematic Shorts

FUNDAMENTALTOTAL RETURN

Sustainable and/or growing

streams of income

underpinned by asset value

OPPORTUNISTIC

Identifiable catalysts

LONG

MAX

Position Size

Typical

Position Size3% <1.0%MAX

Position Size 5% 1.0-2.5%Typical

Position Size

SHORT

Longs: Screen for 3 Distinct Investment Criteria Shorts: employed to generate alpha and/or reduce risk

Time Horizon: 3-5 Years Time Horizon: <1 Year



Fundamental Research Process

Our process begins with the broad universe of listed companies

“BUY” LIST of 60-100 companies

Technical

Analysis:EVA Analysis 150-200 Stocks

Investment

Style:

Fundamental

Analysis:

350-450 Stocks (including Opportunistic finds)

This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

INITIAL SCREEN TO ELIMINATE COMPANIES BELOW $1B IN MARKET CAP AND DAILY LIQUIDITY BELOW $10M

Capital Growth

• ROIC > 12%

• Revenue Growth > GDP Growth

Total Return

• Dividend Yield > Market

• Dividend Growth > GDP Growth

Attractiveness of Business

• Industry Economics

• Alignment with Mega-Trends

• Competitive Position

• Financial Characteristics

• Balance Sheet

Valuations

• Future Growth Value

• Wall Street perspective

• Correctable Error

• Hidden Assets/Special

Situations

• Relative Value

• Credit Valuation

Strength of Management

• Business Strategy

• Ability to Execute

• Experience

• Track Record

• Incentives

LONGS SHORTS

Fundamental

• Potential Earnings Miss

• Thematic Shorts

“SELL” LIST of 20-50 companies

Liquidity/Sentiment Analysis

75-100 Stocks

Catalyst Drivers

• Industry dynamics

• Company and competition dynamics

• Sell-side consensus estimates

• Balance Sheet

• Buy-side sentiment

• Shareholder base

• Management turnover



5

1

• 60+ Positions

• Max 5% position

• Min Market Cap

$250m

• Diversified across

sectors

LONGS 2

• 20+ positions

• Max 3% position

• Avoid high short

interest

• 30% stop loss

FUNDAMENTAL

SHORTS

3

• Hedge exposures

to target risk level

• Industry

• Sector

• Market Cap.

• Geography

MARKET SHORTS

PORTFOLIO EXPOSURES4

Macro Aware Framework

• Credit spreads

• Market volatility

• Corporate earnings

Improving Macro Environment

• Higher gross & net exposure

Worsening Macro Environment

• Lower gross & net exposure

INDEPENDENT RISK OVERSIGHT

• Portfolio Analytics

• Operational Risk

• Legal & Compliance

• Internal Audit

Net Exposure

(Longs - Shorts)

0%

50%

100%

Gross Exposure

(Longs + Shorts)Longs Fundamental

Shorts

Net

~30-60%

Max:

150%

Min: -20%

Gross

~90-130%

Max:

160%150%

Market

Shorts

1 2 3 4

This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman.

Disciplined Portfolio Construction Process

Flexibility to rapidly respond to changing market conditions


STRATEGY ANALYSIS


For Illustrative purposes only. Performance contribution estimates expressed gross of fees using a total return methodology as of 12/31/2017. Since Inception: 12/29/2011 – 12/31/2017. Equity long excess return defined as total return equity long minus S&P 500 TR. Short excess return defined as S&P 500 TR minus short total return. Past performance is not indicative of future results.

8.9%

2.7%

-2.6%

-5.6%

0.3%

3.4%

1.0%0.3%

3.2% 4.0%5.3%

-0.5%

9.1%

3.8%

-10%

0%

10%

20%

30%

2012 2013 2014 2015 2016 2017 Since Inception

Equity Long Excess Return Short Excess Return(Annualized1)

NB Long Short Strategy: Excess Return by Calendar Year

Equity long holding period: 3-5 years; Fundamental short holding period: <1 year

Excess Return: Equity Long & Short



• Stable and consistent exposures since

inception of the mutual fund

• Maintained exposures and avoided

whipsaw in market pull backs

August/September 2015

January/February 2016

• Gradually increased gross exposure

throughout 2017 given more attractive

stock picking environment

Data presented as of 06/30/2018For illustrative purposes only. Exposures are shown for Neuberger Berman Long Short Fund

NB Long Short Strategy: Historical Portfolio Exposure

Gross

Net

Disciplined management of gross and net exposure; macro aware view

NB US Long Short Equity Fund Gross & Net Exposure


0%

20%

40%

60%

80%

100%

120%

140%

160%

2012 2013 2014 2015 2016 2017 2018

14


NB Long Short Strategy: Historical Monthly Performance1

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year

2018 2.22% -2.25% -0.53% 0.22% 0.49% 0.70% 0.79%

2017 1.97% 1.85% 0.24% 2.18% 0.91% 1.25% 1.03% -0.04% 0.87% 0.30% 2.13% 1.13% 14.70%

2016 -2.95% 0.42% 4.59% 0.29% 1.08% -0.59% 1.39% -0.51% 0.42% -0.59% 0.88% 0.73% 5.12

2015 -1.10% 2.51% 0.73% 0.04% -0.17% -0.49% -0.18% -2.33% -2.56% 3.26% -1.06% -1.06% -2.53%

2014 -1.91% 2.13% -0.11% 0.12% 1.38% 1.05% -0.88% 2.38% -1.56% 1.08% 1.20% -0.74% 4.10%

2013 2.56% 0.74% 2.05% 1.08% 0.90% -0.78% 2.17% -0.70% 2.63% 2.01% 1.16% 1.47% 16.33%

2012 2.34% 2.87% 0.81% 0.71% -0.52% 1.94% 1.16% 1.06% 0.69% 0.68% 0.32% 1.44% 14.32

Risk Statistics 3 Years 5 Years Since Inception

Annualized Return 5.28% 6.10% 7.91%

Beta 0.48 0.47 0.44

Standard Deviation 5.38 5.09 4.82

R-Squared 0.79 0.80 0.76

Upside Capture 40.59 34.57 31.65

Downside Capture 53.50 51.89 43.24

1. Gross of fee returns. Periods less than one year are not annualized.Indices are unmanaged, are not available for direct investment and are not subject to fees and expenses typically associated with managed accounts or investment funds. Past performance is not necessarily indicative of future results. As with any investment, there is the possibility of profit as well as the risk of loss. See additional disclosures at the back of this piece, which are an important part of this presentation.



Risk Considerations

Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.

Liquidity Risk: The risk that the Fund may be unable to sell an investment readily at its fair market value. In extreme market conditions this can affect the Fund’s ability to meet redemption requests upon demand.

Derivatives Risk: The Fund is permitted to use certain types of financial derivative instruments (“FDI”) (including certain complex instruments) which can give rise to particular risks, including market risk, liquidity risk and counterparty credit risk. This may increase the Fund’s leverage significantly which may cause large variations in the value of your share.

Credit Risk: The risk that bond issuers may fail to meet their interest repayments, or repay debt, resulting in temporary or permanent losses to the Fund.

Counterparty Risk: The risk that a counterparty will not fulfil its payment obligation for a trade, contract or other transaction, on the due date.

Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events.

Currency Risk: Investors who subscribe in a currency other than the base currency of the Fund are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment.


APPENDIX

MARKET OUTLOOK

Source: Neuberger BermanUpdated: 06/30/2018This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this presentation.

Macro Overview

• Global Growth

• U.S. Business Cycle – Mid, Late or at the End

• Corporate and Consumer Confidence

• U.S. Politics


Summary Macro Update

We believe we are in the midst of a global synchronized recovery with a favorable backdrop for

corporate earnings growth

Source: Credit Suisse . As of 12/31/2017. See Additional Disclosures at the end of this presentation, which are an important part of this presentation.

NOMINAL GDP GROWTH: 2018E LED BY U.S. GLOBAL PMIs: EXPANDING FOR ALL REGIONS

STILL IN A MODEST EXPANSION PHASE ECONOMIC INDICATORS BROADLY POSITIVE


U.S. Corporate and Consumer Confidence

The state of the consumer remains very solid led by stable and improving economic conditions

CONSUMER CONFIDENCE: HIGHEST SINCE DEC. 2000UNEMPLOYMENT RATE: AT A 17-YEAR LOW

Source: Credit Suisse . As of 12/31/2017. See Additional Disclosures at the end of this presentation, which are an important part of this presentation.

NFIB SMALL BUSINESS OPTIMISM INDEX: AT HIGHS EARNINGS AND TAXES: EPS ESTIMATES MOVING HIGHER


Source: Neuberger BermanUpdated: 06/30/2018This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this presentation.

Market Overview

• Low Volatility and High Returns: Secular or Cyclical?

• 2018 Volatility: Equity vs. Credit View

• Fundamentals Take Center Stage

• Valuations vs. Interest Rates

• Valuation Through an Economic Profit Analysis


New paradigm or reversion to the mean

Past five years have been characterized by high returns and correlations with low volatility

As of 03/31/2018. Past performance is not indicative of future results. See Additional Disclosures at the end of this presentation, which are an important part of this presentation.U.S. High Yield is represented by ICE BofAML US High Yield Master II Index. U.S. Investment Grade is represented by Bloomberg Barclays US Corporate Bond Index and U.S. Treasury 5-10YR is represented by Bloomberg Barclays U.S. Treasury 5-10 Year Bond Total Return Index.

Asset Class

Annualized

Return

Standard

Deviation

Sharpe

Ratio

S&P 500 13.3% 9.8% 1.33

Russell 2000 11.5 13.8 0.81

U.S. High Yield 5.0 5.2 0.90

U.S. Investment Grade 3.0 4.1 0.67

U.S. Treasury 5-10YR 1.0 5.1 0.16

Period ending March 31st, 2018

Annualized

Return

Standard

Deviation

Sharpe

Ratio

6.5% 14.8% 0.31

7.4 19.8 0.28

6.5 9.0 0.51

5.6 5.3 0.69

5.1 5.5 0.57

5 Years 20 Years



Equity market sentiment remains subdued

JPM US HY Index represents the J.P. Morgan Domestic High Yield Index designed to mirror the investable universe of U.S. dollar domestic high yield corporate debt market. The CBOE Volatility Index, known by its ticker VIX, is measure of the stock market’s expectation of volatility implied by S&P 500 index options, calculated and published by the Chicago Board Options Exchange (CBOE).Past performance is not indicative of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index. See Additional Disclosures at the end of this presentation, which are an important part of this presentation. Source: Neuberger Berman, J.P. Morgan

5

10

15

20

25

30

35

40

350bp

400bp

450bp

500bp

550bp

600bp

650bp

700bp

750bp

800bp

850bp

900bp

2011 2012 2013 2014 2015 2016 2017 2018

VIX

Ind

exS

pre

ad (

bp

s)

JPM US HY Index VIX Index (5-day average)

Despite the spike in the VIX, underlying stress across capital markets appears well-contained


Historical Earnings Growth and Annualized Returns

As of 04/30/2018Source: Bloomberg

-5%

0%

5%

10%

15%

20%

1980-1990 1990-2000 2000-2010 2010-current

Annualized Return EPS CAGR

S&P 500 Earnings Growth and Total Return

Fundamentals take center stage


Valuations and Interest Rates

As of 04/30/2018Source: Bloomberg

12.0

21.3

18.217.6

0

5

10

15

20

25

30

1980-1990 1990-2000 2000-2010 2010-current

High Low Median

10.4

6.5

4.4

2.3

0

3

6

9

12

15

18

1980-1990 1990-2000 2000-2010 2010-current

S&P 500 LTM P/E US Treasury 10 Year Yield

(x) (%)

P/E’s appear to be discounting a higher rate environment


What are we paying today for future economic profit that has yet to be delivered

This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this presentation.

Total Enterprise Value Capital Invested Current Value

with no growth

Current Value + Future Growth Value

Book value of

equity + net debt

Value of today’s

earnings

Future Growth

Value

Annual growth

in cash flows

Solving for Future Growth Value

Goal of original research is to develop a differentiated view



True profits of the firm after recognizing all costs

Economic Value Added LENS

Source: Neuberger BermanUpdated: 12/31/2017This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

Accounting View

Maximizing ratio’s (ROE, ROA, etc.) can

lead to underinvestment

Maximizing earnings without regard

to capital intensity

No formal recognition for the cost

of equity capital

Economic View

Invest capital where:

return > cost of capital

Reduce capital where:

return < cost of capital

Manage the cost of capital

EVA = NOPAT – Capital charge (Invested Capital x WACC)



Ingenuity of corporate managers, enhanced productivity and expanded global opportunity set

($/per share)

S&P 500 Index Net Profit and Margins

Shaded areas represent U.S. recession periodsSource: Goldman Sachs and Bloomberg estimates Updated: 12/31/2017This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. Indices are unmanaged, are not available for direct investment and are not subject to fees and expenses typically associated with managed accounts or investment funds. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

S&P 500 Net Profit & Margin (trailing four quarters)

0

20

40

60

80

100

120

140

160

180

3%

4%

5%

6%

7%

8%

9%

10%

11%

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Net Profit

($/per share)

5.9%

3.9%

9.5

4.7%

10.5%

Net Profit Margin (%)




0%

25%

50%

75%

100%

2009 2013 2017

Stewardship of capital over a market cycle

% Return to Shareholders

10yr Average: 42%

% Investing for Growth

10yr Average: 58%

Balanced and measured…no lack of investing for tomorrow

1. Based on S&P 500 ex-FinancialsSource: S&P 500 Index constituents based on Bloomberg and Goldman Sachs estimatesUpdated: 12/31/2017This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. Indices are unmanaged, are not available for direct investment and are not subject to fees and expenses typically associated with managed accounts or investment funds. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

2009 – 2017E CAGR Use of Capital

7.4%

5.5%

16.5%

8.5%

4.0%

7.5%

14.3%

0% 5% 10% 15% 20%

Debt¹

Equity

Dividends

Cash Acquisitions

R&D

Capex

Investing for Growth

Capital Management

Total Capital Invested

Share Buybacks




The Cost of Capital

10yr Average: 4.9%

10yr Average: 3.0%

Minimum rate of return sought by investors to compensate them for investment risk

Source: Bloomberg, BofAML, Neuberger BermanUpdated: 12/31/2017This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

US Treasury 10yr Yield US Corporate BBB Yield

0

2

4

6

8

10

12

2005 2009 2013 2017

%

2005 2009 2013 2017




More earnings, capital and economic profit

S&P 500 Economic Value-Added as a Guidepost

Notes: Measured at the beginning of each respective year with the exception of the 2018. 2018E assumes $155 of earnings. Analysis run as of 12/31/2017 and incorporates variable cost of capital and other assumptions utilizing Bloomberg data. Updated: 12/31/2017This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

EVA

$35

$42

$36

$6

$25

$36

$46

$57 $61

$55 $57

$64

$75

$95

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E




Market skepticism around future growth persists but with smaller margin of safety than prior years

1. Measured at the beginning of each respective year with the exception of the “Current” data point (as of 1/12/2018). 2017 is estimated to represent $130 of earnings per share.This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Portfolio managers’ views may differ from those of other portfolio managers as well as the views of Neuberger Berman. Indices are unmanaged, are not available for direct investment and are not subject to fees and expenses typically associated with managed accounts or investment funds. See Additional Disclosures at the end of this piece, which are an important part of this presentation. Investing entails risks, including possible loss of principal.

Expectations for Earnings Growth Remain Subdued

65%

55% 55%

30%

40%

34%

28%31%

23%

0%

20%

1%

-20%-13%

21%

16% 17%

22%25%

19%

11%

11%

3%

6%4% 3% 4%

3%

0%

2%1% -1%

-0.7%

1.9%

1.3% 1.4%

2.2% 1.4%

-8%

0%

8%

16%

24%

32%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current

Impl

ied

L-T

Ann

ual E

arni

ngs

Gro

wth

Fut

ure

Gro

wth

Val

ue (%

of T

otal

Val

ue)

Future Growth Value (% of Total Value) Implied L-T Annual Earnings Growth

’00-’17 Avg. Future Growth Value: 24%

’00-’17 Avg. Implied L-T Annual Earnings Growth: 4%

S&P 500 Future Earnings Values and Earnings Expectations1


CASE STUDIES – LONG AND SHORT

LONG INVESTMENTS


Case Study: Long Investment - Whole Foods Market, Inc. (“WFM”)

• Price: ~$31 (Market Capitalization: ~$10 billion)

• Business: WFM is the largest natural and organics U.S. supermarket with 464 stores,

~87,000 team members, and a customer base that over indexes to higher education and

higher income.

• Thesis:

Differentiated concept with a differentiated and valuable brand

Self-help opportunities

Attractive industry

Optionality with 365 concept

• Valuation: ~7.2x FY’17E EBITDA

Valued as mature concept and significant discount to growth peers; trades at a

discount to recently acquired, lower-quality peers.

• Financial metrics:

$15BN+ in revenues (~97% U.S., 3% Canada/UK); square footage growth at a low-

to-mid single digits percentage rate

◦ $900+ of sales per square foot productivity

~8% EBITDA margins, 11%+ ROIC, Capex ~4% of sales

• Risks: (i) “Over-earning” concerns – pricing, cannibalization, and competition, (ii)

Management and Board sense of urgency, (iii) Corporate structure transition

Data presented as of 12/31/2016This material is intended as a broad overview of the portfolio manager’s current style, philosophy and process. We have provided the above example of the team’s investment process for illustrative purposes only. Please note, we have chosen to provide narrative on these particular securities mainly on the basis that they offer a solid framework within which to describe the team’s research process. The securities have not been chosen based on performance and do not represent the securities most recently added to the team’s portfolios. Past performance is no guarantee of future results. See Additional Disclosures at the end of this piece, which are an important part of this presentation..

SUGGESTIVISM

• Neuberger Berman has been involved in numerous meetings and conference

calls with WFM leadership, competitors, and suppliers as well as multiple letters

to the Board of Directors

Initial thesis: Brand is “bigger” than the company; a broken – but fixable – investment story with

key strategic assets in an attractive and growing industry


• Revenue growth over 10% driven by 5% global PCE

growth + 5% secular shift from cash to electronic

payments (long runway of growth)

• Strong moat given “chicken and egg” problem of

creating a new network…

• High fixed costs / low capital needs inherent to network

create strong incremental margins and high ROIC

• Visa Europe acquisition presents strong pricing

opportunities over the next few years

Electronification of payments amplified by e-commerce tailwinds drive secular growth

BACKGROUND

• Visa is the largest global payment network connecting

merchants, banks, and credit / debit card holders

• Visa collects a small fee for every payment transaction that

rides along the Visa network “rails”

Case Study: Long Investment – Visa (“V”)

INVESTMENT THESIS

This material is intended as a broad overview of the portfolio manager’s current style, philosophy and process. We have provided the above example of the team’s investment process for illustrative purposes only. Please note, we have chosen to provide narrative on these particular securities mainly on the basis that they offer a solid framework within which to describe the team’s research process. The securities have not been chosen based on performance and do not represent the securities most recently added to the team’s portfolios. Past performance is no guarantee of future results. See Additional Disclosures at the end of this piece, which are an important part of this presentation..

POTENTIAL RISKS

VISA GROWTH ALGORITHEM


• Regulation

• Competition from new payment schemes –

Alipay / WeChat

• Valuation

VISA PRICE PERFORMANCE SINCE IPO


• We believe there is still a long runway for digital

advertising penetration (40%+ in 2017) over the next 10

years which will drive continued strong top line growth

for Google.

• Current valuation gives little credit for other bets as they

are in investment mode with little public disclosure

• We believe a higher standard for global privacy rights

could actually be a positive as it creates a high

compliance burden for smaller digital advertising

competitors

Significant runway for digital advertising growth plus optionality on other bets

BACKGROUND

• Google’s ubiquitous search engine drives incredible

profitability to invest in other big ideas

• Google’s other bets include self-driving cars, life sciences

and long shot Google X projects

Case Study: Long Investment – Google (“GOOGL”)

INVESTMENT THESIS


POTENTIAL RISKS


• Regulation

• Competition from voice search

• Cultural change from start-up to large

corporation

Dominant desktop market share

Dominant mobile search share


• Cambridge Analytica scandal in early 2018 created

opportunity to acquire shares of a best-in-class business

model at below market multiples.

• Checks suggest advertisers have not pulled back from

advertising on the FB platform

• We believe FB can earn approximately $10 in EPS in

2019.

• Similarly to Google, a higher standard for global privacy

rights could be a positive as it creates a high compliance

burden for smaller digital advertising competitors

Best in class monetization and profitability metrics at a reasonable valuation

BACKGROUND

• Global social media platform which owns Facebook,

Instagram, WhatsApp and Facebook messenger

• Vast majority of revenues come from highly targeted

advertising model

Case Study: Long Investment – Facebook (“FB”)

INVESTMENT THESIS

This material is intended as a broad overview of the portfolio manager’s current style, philosophy and process. We have provided the above example of the team’s investment process for illustrative purposes only. Please note, we have chosen to provide narrative on these particular securities mainly on the basis that they offer a solid framework within which to describe the team’s research process. The securities have not been chosen based on performance and do not represent the securities most recently added to the team’s portfolios. Past performance is no guarantee of future results. See Additional Disclosures at the end of this piece, which are an important part of this presentation.

POTENTIAL RISKS


• Long term growth drivers outside of FB’s current

drivers still unclear.

• Regulation/Privacy rights

Strong Organic revenue growth

Best in class free cash flow margin

30%

40%

50%

60%

70%

80%

3/31/2013 3/31/2014 3/31/2015 3/31/2016 3/31/2017 3/31/2018

Organic revenue growth

10%

20%30%

40%50%

60%70%

3/31/2013 3/31/2014 3/31/2015 3/31/2016 3/31/2017 3/31/2018

FCF margin


Global information powerhouse, with robust and recurring free cash flow, positioned to accelerate

15.9x17.6x

13.8x 14.5x

0.0x

5.0x

10.0x

15.0x

20.0x

INFO Peers

Price / FCF per share 2017 Price / FCF per share 2018

21%

11%

18%

10%

0%

5%

10%

15%

20%

25%

INFO Peers

Adj. EPS growth 2017 Adj. EPS growth 2018

Peers include CEB, DNB, EFX, FDS, IT, MCO, MSCI, NLSN, SPGI,

TRI, TRU, VRSK.

Case Study: Long Investment - IHS Markit (“INFO”)

• Global leader in mission-critical data, analytics, research, and

operational solutions for the energy, financial services, and

transportation industries.

• IHS merger creates a global information powerhouse:

Combination of two leading information companies should

create a more dynamic and diversified organization.

• Aggressive management team should drive greater profitability

through reducing duplicative costs, as well as foster robust

innovation for future new and cross-sales. We believe three-

year cost synergy target is likely conservative.

• Organic constant currency growth should accelerate: to mid to

high single digits from low single digits, as IHS’s energy end

markets stabilize and Markit’s newest compliance cost

• Brexit could increase sales cycles on some of Markit’s

solutions to European financial institutions.

• Worsening global energy industry fundamentals would sap

demand for IHS subscriptions.

• Merger integration risks, particularly retention of key

sales/R&D personnel.

INFO vs Peers: Price to FCF

INFO vs Peers: Est'd EPS growth


BACKGROUND

INVESTMENT THESIS

POTENTIAL RISKS


SHORT INVESTMENTS

• Industry facing structural (e.g., lower entry barriers, e-

commerce), and cyclical (e.g., inflation) pressures

• Portfolio brand concerns in select structurally challenged

consumer segments (e.g., cereal, baked goods)

• Market share losses to smaller, more contemporary

brands (e.g., Yoplait a share loser)

• Capital allocation and capital structure (~4.5x leverage)

questions with recent Blue Buffalo acquisition

Near-term industry and company-specific headwinds

BACKGROUND

• Leading global manufacturer of branded consumer

foods, including cereals, snacks, yogurt and meals

• Customers include grocery stores, mass merchants

(Wal-Mart ~20% of sales), club stores, discount chains

and e-commerce providers

• In February 2018, announced acquisition of Blue Buffalo

pet food for $8 billion (~25x EBITDA)

Case Study: Short Investment – General Mills, Inc. (“GIS”)

INVESTMENT THESIS


POTENTIAL RISKS

STOCK PRICE – LAST 12 MONTHS THROUGH MARCH 31, 2018

• Organic growth re-acceleration

• Investor sentiment and positioning

• Valuation

$35

$45

$55

$65

3/31/2017 5/30/2017 7/29/2017 9/27/2017 11/26/2017 1/25/2018 3/26/2018


• Franchise defining Strategic Value Dividend strategy

($34B of AUM) has flipped from strong inflows to outflow

due to poor performance (bottom decile)

SVD strategy represents 30% of total firm profits

• Lackluster performance in other funds with generally

high fee rates puts additional pressure on flows

• Fee pressure is intensifying in MMF industry with

Federated at high end of cost curve

FII has been losing MMF share last 4 years (-4% avg

flows vs. flattish for industry)

• Likely results in LT margin pressure

Asset manager with upcoming negative inflection in flows due to poor performance in key fund

BACKGROUND

• Federated is a small asset manager known for MMF

business, but has shown strong growth in equity franchise

last few years

• Mix of revenue – 40% MMF, 40% equity, 20% fixed income

Case Study: Short Investment – Federated Investors (“FII”)

INVESTMENT THESIS


POTENTIAL RISKS

Strategic Value Dividend Performance (per Morningstar)


• Better investment performance

• Stronger accretion from Hermes acquisition

• Valuation

YTD Price Performance (- 31% total return)


PORTFOLIO OVERSIGHT


Portfolio Oversight & Governance

Oversight

Investment

Management

Monitoring/

Engagement

Involvement/

OversightMonitoring

Engagement/

InvolvementACTIVITY/

ESCALATION

OWNERS Portfolio Managers

Asset Management

Guideline Oversight

(AMGO)

Portfolio Analysis &

Risk (PAR)

CIOs & Portfolio

Managers

(with PAR)

Investment Risk

Committee (IRC) (with

CIOs)

MF & UCITS fund

Boards (MFB), Board

of Directors

TASKS

• Security selection

• Portfolio

construction

• Deployment of

active risk

• Guidelines,

constraints, and

limits monitoring

• Code restrictions

into the order

management

system

• Tools utilized:

Aladdin, Charles

River, etc.

• Risk strategy- and

firm-level

dashboards

• Scenario analysis

and stress testing

• Liquidity monitoring

• Tools utilized:

Factset, Barra,

Aladdin, POINT,

etc.

• Investment process

oversight

• Product review

meetings/

discussions

with PMs

• Intervention where

required

• Review with

executive

management

• Semi-monthly

meetings

• Formal review of

specific

strategies/new

strategies

• Review of all

strategies

on quarterly basis

• Governance

• Review of

performance/

risk/personnel

1 2 3 4 5 6

A six-step continuous process



Environmental, Social and Governance

* Avoidance screens can be combined with other ESG integration strategies based on client requests.Note: Investment strategies’ ESG integration approaches may evolve over time.

Philosophy

As a firm, Neuberger Berman believes that material environmental, social and governance characteristics are an important driver of long-term investment returns from both an

opportunity and a risk mitigation perspective.

Distinctive Features

• Dedicated ESG Investing team and ESG Committee that supports strategy-specific ESG integration across our platform

• Proprietary ESG ratings based on principle of financial materiality developed by sector analysts using range of data sources

• Active engagement through over 1,500 management meetings in our offices, robust governance policy including proxy voting and shareholder activism

ESG Integration Framework

NB INVESTMENT

STRATEGY

EXAMPLES

ASSESS AMPLIFY

Excluding particular companies

or whole sectors from

investment universe

Considering the valuation

implications of ESG risks and

opportunities alongside traditional

factors in the investment process

Focusing on ‘better’ companies

based on environmental, social and

governance characteristics

Seeking to intentionally generate

social and environmental impact

alongside a financial return

Separately Managed Accounts

have customized exclusions

based on a client’s values

UCITS avoid companies that

produce anti-personnel land

mines, cluster munitions,

biological/chemical weaponry

Emerging Market Debt

team assesses the ESG

characteristics of

sovereign issuers

Global Non-Investment

Grade Credit team incorporates ESG

assessment into internal

credit ratings

Socially Responsive Investing

Equities strategy is built on the

belief that responsibility is a

hallmark of quality and invests in

U.S. companies that have a

sustainable competitive advantage.

Customized Short Duration

Investment Grade Credit strategy

focuses on ‘best-in-class’ issuers as

well as taking sector bias to lower

portfolio carbon footprint and

increase diversity vs. benchmark

Municipal Fixed Income Impact

strategy invests in projects that

support socially and environmentally

sustainable communities, such as

mass transit, affordable housing, and

school classrooms, with a bias toward

underserved communities

Private Markets Impact strategy

targets investments with a thematic

lens to address the UN Sustainable

Development Goals

AIM FOR IMPACT

INTEGRATION

APPROACH

AVOID*

ESG factors are considered by portfolio managers across the platform


NEUBERGER BERMAN US LONG SHORT EQUITY FUND


Current Positioning Neuberger Berman US Long Short Equity Fund

1. As at August 31, 2018. Top positions are as of the most recent quarter end.

Portfolio composition as at August 31, 2018

Investment Bucket

Visa Inc. Class A 2.71 Capital Growth

JPMorgan Chase & Co. 2.35 Capital Growth

IHS Markit Ltd. 2.24 Capital Growth

Facebook, Inc. Class A 2.16 Opportunistic

Enbridge Inc. 2.16 Total Return

Alphabet Inc. Class A 2.15 Capital Growth

Conagra Brands, Inc. 2.09 Opportunistic

Expedia Group, Inc. 2.05 Capital Growth

PVH Corp. 2.04 Opportunistic

General Dynamics Corporation 2.03 Capital Growth

TOP 10 LONG EQUITY HOLDINGS (%)1

Williams-Sonomic Inc. 0.57

Core Laboratories N V 0.57

Discovery Communications Inc. 0.53

General Mills Inc. 0.52

Western Union Co. 0.52

TOP 5 SHORT EQUITY HOLDINGS (%)1

Long Exposure

Capital Growth 65.38

Total Return 16.83

Opportunistic 17.80

Short Exposure

Fundamental Shorts 35.64

"Market" Shorts 64.36

LONG PORTFOLIO COMPOSITION (%)

SHORT PORTFOLIO COMPOSITION (%)



Neuberger Berman US Long Short Equity Fund – Historical Performance

Source: Neuberger Berman.1. Net of fees. Representative of the USD Class I Accumulating share class.

PERFORMANCE SINCE INCEPTION (FEBRUARY 28, 2014)

As of August 31, 2018

Fund1

1 Month 0.67%

3 Months 3.54%

YTD 2.92%

1 Year 6.76%

3 Years 5.29%

Since Inception (Cumulative) 20.00%

Since Inception (Annualised) 4.13%



Neuberger Berman US Long Short Equity Fund

Daily liquid UCITS Fund

Investment Manager Neuberger Berman Europe Limited

Vehicle / Structure

Irish-domiciled fund

Authorised by the Central Bank of Ireland

UCITS

Independent Board members

Daily Liquidity

Domicile Dublin

Inception Date Feb 28th, 2014

Fees

Class I USD Acc: 1.35%

Class I USD Acc (PF): 1.00%

Perf Fee(PF): 15% on PF classes

Maximum TER Class I USD Acc: 1.55%

Class I USD Acc (PF): 1.20% (excluding perf. fees)

Minimum Subscription Class I USD Acc: USD 2,500,000

Fund Codes ISIN Class I USD Acc : IE00BJTCX997

Administrator BBH

Benchmark Not Benchmarked

Base Currency US Dollars

1. Fees as of latest available Prospectus. Please check with your Neuberger Berman representative to see if these share classes are available at this time.


BIOGRAPHIES


Team Biographies

Charles C. Kantor, is a Managing Director and Senior Portfolio Manager for Neuberger Berman’s Long Short and Guardian Strategies. He joined the firm in

2000. Prior to joining the firm, Charles was a managing director of Stern Stewart’s Financial Institutions division. There he advised clients on implementing EVA-

based financial management systems and co-authored academic papers in the Journal of Applied Corporate Finance. In addition, Charles is a regular

commentator and contributor to various financial and business news media outlets. He earned a Bachelor of Commerce in Accounting and Economics from the

University of Cape Town, South Africa and an MBA (with honors) from Harvard University Graduate School of Business.

Marc Regenbaum, Managing Director, joined the firm in 2007. Marc is an Associate Portfolio Manager for the Long Short and U.S. Equity Team. Prior to joining

the team in 2010, he was an Associate Analyst on the Energy team within the Neuberger Berman Research Department primarily focused on climate change-

related company research and the Neuberger Berman Climate Change Mutual Fund. Marc helped launch the Fund while working in Neuberger Berman’s Office of

the Chief Investment Officer. Marc began his career as an analyst for Credit Suisse First Boston’s Investment Banking division in the Retail group and subsequently

worked at Tower Capital, a hedge fund of funds, and Helios Partners Fund Management, a long/short equity hedge fund, where he covered the retail and consumer

sectors. Marc earned a BA in Economics (with honors) from Duke University, as well as an MBA (with honors) from New York University’s Stern School of

Business.

Raman Gambhir, Senior Vice President, joined the firm in 2015. Raman is a Senior Research Analyst for the Kantor Group. Prior to joining the firm, Raman was

an analyst at Visium Asset Management, where he focused on a long-biased credit and equity strategy and a long/short fund. Previously, he was a senior credit

analyst at Brevan Howard Credit Catalysts Limited. Raman began his career as an analyst for Banc of America Securities’s Investment Banking division in the

Mergers and Acquisitions/General Industrials Group and subsequently worked at Prospect Partners, LLC, a private equity firm, and Goldman Sachs & Co., where

he served as an associate in the Leveraged Finance Group. Raman earned a BA in Finance (with honors) from the University of Illinois, as well as an MBA from the

MIT Sloan School of Management.

Charles Nguyen, CFA, Managing Director, joined the firm in 2006. Charles is a Senior Research Analyst for the Long Short Team. Prior to joining the firm, Charles

was an associate at Goldman Sachs & Co., where he focused on equity research in the Biotechnology sector. Charles began his career as an analyst for Merrill

Lynch & Co.’s Investment Banking division in the Healthcare group. Charles earned a BS in Business Administration (with honors) from Georgetown University. He

has been awarded the Chartered Financial Analyst designation.



Team Biographies

Ralph A. DeFeo, CFA, CPA, Senior Vice President, joined the firm in 2007. Ralph is a Senior Research Analyst for the Long Short Team. Prior to joining the Long

Short team, he was a Research Analyst on an equity portfolio management team within the firm. Previously, he was a senior associate focusing on complex

valuations at PricewaterhouseCoopers, LLP. Ralph began his career as a CPA for Ernst & Young, LLP. He earned a BBA (with honors) from Hofstra University and

an MBA (with honors) from Fordham University. In addition, he is a Certified Public Accountant and has been awarded the Chartered Financial Analyst designation.

Frank Bisk, Vice President, joined the firm in 2012. Frank is a Research Analyst for the Long Short Team. Prior to joining Neuberger Berman, Frank was a senior

equity analyst supporting both Separately Managed Accounts (SMAs) as well as a long/short equity hedge fund at Pilot Advisors, LP, a registered investment

advisor (RIA). From 2001 to 2002 Frank worked for the value arm of Balis Lewittes and Coleman, Inc. as an equity analyst. From 1997 to 2001 Frank was an

associate in the structured finance group of Stroock & Stroock and Lavan, LLP a New York law firm. Frank earned a JD from Brooklyn Law School and a BA from

the University of Michigan.

Amy B. Norflus, Vice President, joined the firm in 2012. Amy is a Research Analyst for the Long Short Team. Prior to joining Neuberger Berman, Amy was a

senior equity analyst supporting both Separately Managed Accounts (SMAs) as well as a long/short equity hedge fund at Pilot Advisors, LP, a registered

investment advisor (RIA). From March 2000 to March 2002 Amy was an equity analyst for the value arm of Balis Lewittes and Coleman, Inc with responsibilities

for SMAs and a long/short equity hedge fund. Previously Amy was a member of the equity investment team at Glickenhaus & Co. from 1994 to 2000. Amy began

her career at Stacey Braun Associates as an assistant portfolio manager. Amy earned her BBA from Baruch College.

Kelly M. McMahon, Vice President, joined the firm in 2007. Kelly is a Portfolio Specialist who specializes in analyzing and monitoring the composition and

performance of the long/short portfolios. In addition, Kelly works with the portfolio management team with regard to internal distribution initiatives and external

client relationship management. Prior to this role he was a sales associate for Official Institutions in EMEA and prior to that a risk associate for fixed

income. Previously, he was a financial analyst at the Federal Home Loan Bank of Chicago. Kelly earned a BS in Business Administration from the University of

Missouri.


DEFINITIONS AND DISCLOSURES

NB Long Short strategy

Annualized Rates of Return – as of June 30, 2018

Please see attached important disclosures which contain complete performance information and definitions.

¹ Periods less than 1 year are not annualized.

For Professional Client Use OnlyFor Professional Client Use Only

Annualized Rates of Return¹ (%, for periods ended June 30, 2018)

2Q 2018 YTD 1 Year 3 Years 5 Years

Since Inception

(1/1/2012)

Total Portfolio Return (Gross of Fee) 1.41 0.79 6.36 5.28 6.10 7.91

Total Portfolio Return (Net of Fee) 1.16 0.29 5.31 4.24 5.05 6.84

S&P 500 Index 3.43 2.65 14.37 11.93 13.42 14.99

55


Calendar Year Rates of Return



Annual Rates of Return (%, for periods ended December 31)

Total Portfolio Return

(Gross of Fee)

Total Portfolio Return

(Net of Fee) S&P 500 Index

2017 14.70 13.35 21.83

2016 5.12 3.70 11.96

2015 -2.53 -3.82 1.38

2014 4.11 2.60 13.69

2013 16.33 14.52 32.39

2012 14.32 12.42 16.00


NB Long Short strategy (Inception 1/1/2012)

Compliant Presentation


For Professional Client Use OnlyFor Professional Client Use Only

Composite Benchmark Composite 3 Year Standard Deviation

Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

S&P 500 Index

(%)

No. of

Accounts

Market Value

($, m)

Total Firm

Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

S&P 500 Index

(%)

YTD Jun-

20180.79 0.29 2.65 ≤ 5 3,692.8 -- -- -- 5.38 10.02

2017 14.70 13.56 21.83 ≤ 5 3,479.0 295.2 1.18 -- 5.27 9.92

2016 5.12 4.08 11.96 ≤ 5 2,519.6 255.2 0.99 -- 5.50 10.59

2015 -2.53 -3.50 1.38 ≤ 5 3,234.4 240.4 1.35 -- 5.23 10.47

2014 4.11 3.07 13.69 ≤ 5 3,474.5 250.0 1.39 -- 4.13 8.97

2013 16.33 15.18 32.39 ≤ 5 1,978.7 241.7 0.82 -- -- --

2012 14.32 13.18 16.00 ≤ 5 182.4 205.0 0.09 -- -- --

57


Investment Performance Disclosure Statement

Compliance Statement• Neuberger Berman Group LLC ("NB", "Neuberger Berman" or the "Firm") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in

compliance with the GIPS® standards. Neuberger Berman was independently verified for the period January 1, 2011 to December 31, 2016. The GIPS® firm definition was redefined effective January 1,2011. For prior periods there were two separate firms for GIPS® firm definition purposes and such firms were independently verified for the periods January 1, 1997 to December 31, 2010 and January1, 1996 to December 31, 2010, respectively. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS® standards on a firm-wide basis and(2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS® standards. Verification does not ensure the accuracy of any specific compositepresentation. The verification reports are available upon request.

Definition of the Firm• The firm is currently defined for GIPS® purposes as Neuberger Berman Group LLC, ("NB", "Neuberger Berman" or the "Firm"), and includes the following subsidiaries: Neuberger Berman Investment

Advisers LLC, Neuberger Berman Europe Ltd., Neuberger Berman Asia Ltd., Neuberger Berman East Asia Ltd., Neuberger Berman Singapore Pte. Ltd., Neuberger Berman Taiwan Ltd, NeubergerBerman Australia Pty. Ltd., Neuberger Berman Trust Company N.A., Neuberger Berman Trust Company of Delaware N.A. and NB Alternatives Advisers LLC.

Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The NB Long Short Composite (the "Composite") includes the performance of all fee-paying Long Short portfolios with no investment minimum managed on a fully discretionary basis by the Kantor

Group. The Long Short strategy is designed for investors who seek full participation in the broad equity and fixed income market. The strategy allows investment in exchange-traded and OTC derivative contracts (including, but not limited to, options, futures, swaps, and forward currency contracts) for the purposes of risk, volatility, and currency exposure management. The strategy allows leverage up to but not exceeding three times the value of a portfolio's investments through the use of repurchase financing arrangements with counterparties. Inherent in derivative instrument investments is the risk of counterparty default. Leverage may also magnify losses as well as gains to the extent that leverage is employed. The Composite was created in December 2013 and the performance inception date is January 2012. The Composite performance schedule is provided as supplemental information to the NB Equity composite. A Complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is the S&P 500 Index. The index is a capitalization weighted index comprised of 500 stocks chosen for market size, liquidity, and industry group representation. The S&P 500 Index is

constructed to represent a broad range of industry segments in the U.S. economy. The S&P 500 focuses on the large-cap segment of the market with over 80% coverage of US equities. Criteria for inclusion include financial stability (minimize turnover in the index), screening of common shares to eliminate closely held companies, and trading activity indicative of ample liquidity and efficient share pricing. Companies in merger, acquisition, leveraged-buy-outs, bankruptcy (Chapter 11 filing or any shareholder approval of recapitalization which changes a company's debt-to-equity ratio), restructuring, or lack of representation in their representative industry groups are eliminated from the index.

Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Portfolios in the Composite use an all - inclusive fee schedule which includes investment advisory fees, trading expenses, custody fees, and other administrative fees.• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by

investment advisory fees (including Performance Based Fees and Carried Interest).Fee Schedule• The annual investment advisory fee, payable quarterly, for each portfolio with a market value of less than $10mn is: 1.5% of the first $2.5mn of market value; 1.4% of the next $2.5mn of market value;

1.3% of the next $2.5mn of market value; 1.2% of the next $2.49mn. This fee schedule is only applied to the Equity allocation of each portfolio with a market value less than $10mn. For each portfolio with a market value, equal to, or greater than $10mn, the annual fee payable quarterly is: 1.25% of the first $10mn of market value and 0.9% of the remaining value of market value. This fee schedule is only applied to the Equity allocation of each portfolio with a market value equal to or greater than $10mn.

Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the composite for the entire year. Internal dispersion is not calculated if

the composite does not contain at least 6 portfolios for the entire year.Annualized Standard Deviation• The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The standard deviation is not required for periods

prior to 2011.

For Professional Client Use OnlyFor Professional Client Use Only58


Definitions

Alpha: is a measure of value added. The estimated alpha represents how much of the rate of return on the portfolio is attributable to the managers' ability to derive above-average risk

adjusted returns.

Standard Deviation: measures the dispersal or uncertainty in a random variable (in this case, investment returns). It measures the degree of variation of returns around the mean

(average) return. The higher the volatility of the investment returns, the higher the Standard Deviation will be. For this reason, Standard Deviation is often used as a measure of investment

risk.

Correlation: Correlation is a statistical measure of how a Portfolio moves in relation to it's benchmark. The values for correlation ranges from +1.0 to -1.0. A positive correlation implies

that they move in the same direction. Negative correlation means they move in opposite paths. A correlation of +1.0 means that the Portfolio and Benchmark move exactly in the same

direction. -1.0 means they move in exactly the opposite direction. O means they do not correlate at all with each other.

R Squared: R squared is a statistical measure that explains how two portfolios track each other. R Squared has a range of 0 to 1.0. A higher number means the returns are due to

market returns. An R Squared of 1.0 indicates that the returns are entirely due to market action, while an R Squared of 0, means that the Portfolio has no relationship with the market. R

Squared is a measure of how accurate alpha and beta are. If R squared is low, then Beta may not be a reliable measure.

Upside Capture: The Up Capture ratio is a measure of how the Portfolio performs when the Benchmark is positive. It is calculated by removing the returns when the benchmark is

negative, dividing the remaining portfolio returns by the positive benchmark returns.

Downside Capture: The Down Capture ratio is a measure of how the Portfolio performs when the Benchmark is negative. It is calculated by removing the returns when the benchmark is

positive, dividing the remaining portfolio returns by the negative benchmark returns. The lower the Down Capture Ratio the better the performance in a negative market.

S&P 500 Index: consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value-weighted index (stock price times number of shares

outstanding), with each stock’s weight in the index proportionate to its market value. The “500” is one of the most widely used benchmarks of U.S. equity performance. As of September

16, 2005, S&P switched to a float-adjusted format, which weights only those shares that are available to investors, not all of a company’s outstanding shares. The value of the index now

reflects the value available in the public markets.

HFRI/HFRX Equity Hedge Index: Equity Hedge strategies maintain positions both long and short in primarily equity and equity derivative securities. A wide variety of investment

processes can be employed to arrive at an investment decision, including both quantitative and fundamental techniques; strategies can be broadly diversified or narrowly focused on

specific sectors and can range broadly in terms of levels of net exposure, leverage employed, holding period, concentrations of market capitalizations and valuation ranges of typical

portfolios. Equity Hedge managers would typically maintain at least 50%, and may in some cases be substantially entirely invested in equities, both long and short.

Indices are unmanaged, and the figures for the index shown include reinvestment of all dividends and capital gain distributions and do not reflect any fees or expenses. Investors cannot

invest directly in an index. We strongly recommend that these factors be considered before an investment decision is made.


DisclosuresInstitutional-Oriented Equity and Fixed Income AUM Benchmark Outperformance Note: Institutional-oriented equity and fixed income assets under management (“AUM”) includes the

firm’s equity and fixed income institutional separate account (“ISA”), registered fund, and managed account/wrap (“MAG”) offerings and are based on the overall performance of each

individual investment offering against its respective benchmark offerings and are based on the overall performance of each individual investment offering against its respective benchmark.

High net worth/private asset management (“HNW”) AUM is excluded. For the period ending March 31, 2018, the percentage of total institutional-oriented equity AUM outperforming the

benchmark was as follows: 10-year: 87%; 5-year: 79%; and 3-year: 78% ; and total institutional-oriented fixed income AUM outperforming was as follows: 10-year:77%; 5-year:65%; and 3-

year: 68%. If HNW AUM were included, total equity AUM outperforming the benchmark was as follows: 10-year: 63%; 5-year: 55%; and 3-year: 56%; and total fixed income AUM

outperforming was as follows: 10-year: 77%; 5-year: 65%; and 3-year: 68%. Equity and Fixed Income AUM outperformance results are asset weighted so individual offerings with the

largest amount of assets under management have the largest impact on the results. As of 3/31/2018, five institutional-oriented equity offerings accounted for approximately 50% of the total

firm institutional-oriented equity AUM reflected, and nine institutional-oriented fixed income offerings accounted for approximately 52% of the total firm institutional-oriented fixed income

AUM reflected. Performance for the individual offerings reflected are available upon request. AUM for multi-asset class, balanced and alternative (including long-short equity or fixed

income) offerings, as well as AUM for hedge fund, private equity and other private investment vehicle offerings are not reflected in the AUM outperformance results shown. AUM

outperformance is based on gross of fee returns. Gross of fee returns do not reflect the deduction of investment advisory fees and other expenses. If such fees and expenses were

reflected, AUM outperformance results would be lower. Investing entails risk, including possible loss of principal. Past performance is no guarantee of future results.

Private Equity Outperformance Note: The performance information includes all funds, both commingled and custom, managed by NB Alternatives Advisers LLC with vintage years of 2005

– 2015, with the exception of a closed-end, public investment company registered under the laws of Guernsey (the “Funds”). Accounts that are only monitored are excluded. Vintage years

post 2015 are excluded as benchmark information is not yet available. Please note that private debt funds are also excluded as benchmark data is not yet available for the applicable

vintages.

Percentages are based on the number of funds, calculated as the total number of funds whose performance exceeds their respective benchmarks divided by the total number of all funds

with vintage years of 2005 through 2015. Performance is measured by net IRR, MOIC, and DPI and is compared to the respective index’s median net IRR, MOIC and DPI, respectively.

The Cambridge Secondary Index was used for secondary-focused funds; the Cambridge Buyout and Growth Equity for US and Developed Europe was used for co-investment-focused

funds; the Cambridge Fund of Funds Index was used for commingled funds and custom portfolios comprised of primaries, secondaries and co-investments; and the Cambridge Global

Private Equity was used for strategies focused on minority stakes in asset managers fund and healthcare credit.

The Cambridge Associates LLC indices data is as of September 30, 2017, which is the most recent data available. The Cambridge Associates Fund of Funds Index is the benchmark

recommended by the CFA Institute for benchmarking overall private equity fund of funds performance. The benchmark relies on private equity funds self-reporting data for compilation and

as such is subject to the quality of the data provided. The median net multiple of Cambridge Associates Fund of Funds Index is presented for each vintage year as of September 30, 2017,

the most recent available. Cambridge Associates data provided at no charge.

While one of the secondary funds closed in 2008, Cambridge Associates classifies that particular fund as a 2007 vintage year fund (the year of its formation) and, therefore, the Cambridge

Associates benchmarks used herein are for 2007 vintage year funds.

Private Offerings: Certain strategies referenced herein may only be available through a private offering of interests made pursuant to offering and subscription documents, which will be

furnished solely to qualified investors on a confidential basis at their request for their consideration in connection with an offering. These documents will contain information about the

investment objective, terms and conditions of an investment in such vehicle and will also contain tax information and risk disclosures that are important to an investment decision. Any

decision to invest in such vehicle should be made after a careful review of these documents, the conduct of such investigations as an investor deems necessary or appropriate and after

consultation with legal, accounting, tax and other advisors in order to make an independent determination of the suitability and consequences of an investment in such vehicle.



DisclaimerThis document is addressed to professional clients only.

This document is a financial promotion and is issued by Neuberger Berman Europe Limited, which is authorised and regulated by the Financial Conduct Authority and is registered in

England and Wales, at Lansdowne House, 57 Berkeley Square, London, W1J 6ER and is also a Registered Investment Adviser with the Securities and Exchange Commission in the

U.S. and regulated by the Dubai Financial Services Authority.

This fund is a sub-fund of Neuberger Berman Investment Funds PLC, authorised by the Central Bank of Ireland pursuant to the European Communities (Undertaking for Collective

Investment in Transferable Securities) Regulations 2011, as amended. The information in this document does not constitute investment advice or an investment recommendation and is

only a brief summary of certain key aspects of the fund. Investors should read the prospectus and the key investor information document (KIID) which are available on our website:

www.nb.com/europe/literature. Investment objectives, risk information, fees and expenses and other important information about the fund can be found in the prospectus.

Notice to investors in Switzerland: Neuberger Berman Investment Funds plc is established in Ireland as an investment company with variable capital incorporated with limited liability

under Irish law, and the sub-funds are also authorised by the Swiss Financial Market Supervisory Authority (FINMA) for distribution to non-qualified investors in and from Switzerland.

The Swiss representative and paying agent is BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zürich, Switzerland. The prospectus, the key

investor information documents, the memorandum and articles of association and the annual and semi-annual reports are all available free of charge from the representative in

Switzerland.

This document is presented solely for information purposes and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a

security.

We do not represent that this information, including any third party information, is complete and it should not be relied upon as such.

No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. Each recipient of this document should make such

investigations as it deems necessary to arrive at an independent evaluation of any investment, and should consult its own legal counsel and financial, actuarial, accounting, regulatory

and tax advisers to evaluate any such investment.

It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable.

Any views or opinions expressed may not reflect those of the firm as a whole.

All information is current as of the date of this material and is subject to change without notice.

The fund described in this document may only be offered for sale or sold in jurisdictions in which or to persons to which such an offer or sale is permitted. The fund can only be

promoted if such promotion is made in compliance with the applicable jurisdictional rules and regulations. This document and the information contained therein may not be distributed in

the US. Indices are unmanaged and not available for direct investment.

An investment in the fund involves risks, with the potential for above average risk, and is only suitable for people who are in a position to take such risks. For more information please

read the prospectus which can be found on our website at: www.nb.com/europe/literature.

Past performance is not a reliable indicator of current or future results. The value of investments may go down as well as up and investors may not get back any of the amount invested.

The performance data does not take account of the commissions and costs incurred on the issue and redemption of units.

The value of investments designated in another currency may rise and fall due to exchange rate fluctuations in respect of the relevant currencies. Adverse movements in currency

exchange rates can result in a decrease in return and a loss of capital.

Tax treatment depends on the individual circumstances of each investor and may be subject to change, investors are therefore recommended to seek independent tax advice.

Investment in the fund should not constitute a substantial proportion of an investor’s portfolio and may not be appropriate for all investors. Diversification and asset class allocation do

not guarantee profit or protect against loss.

No part of this document may be reproduced in any manner without prior written permission of Neuberger Berman Europe Limited.

The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC.

© 2018 Neuberger Berman Group LLC. All rights reserved. 230354


neuberger berman us long short equity fund - beconim berman/equity... · 2018. 11. 9. · global,...

Documents