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Neuberger Berman targets pension funds with emerging market equities fund

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  • Neuberger Berman targets pension funds with emerging market equities fund

GLOBAL - Asset manager Neuberger Berman is targeting European pension schemes with an emerging market equities fund proffering diversification from developed markets.

The fund is benchmarked against the MSCI Emerging Markets index, although Neuberger Berman will focus on smaller-cap companies, where it believes the best growth opportunities lie.

Conrad Saldanha, portfolio manager, told IPE: "We follow a fundamental bottom-up strategy, so we are looking for quality companies that are trading at attractive valuations.

"We define that as high-return businesses with low leverage on the balance sheet. Typically they are found among the domestic names, which are by default in the mid and small-cap arena."

The fund manager already has seed money from a "large, sophisticated" Japanese institutional investor, although Neuberger Berman declined to name its first client.

Saldanha said European pension funds were attracted to emerging market equities because uncertainty persisted over the future direction for developed stocks.

"You can find some attractive growth opportunities in the emerging markets at a time when the market is unsure where growth is going in the developed markets," he said.

"The growth differential will persist and get more exaggerated, which will result in greater inflows to emerging markets."

In addition to the markets covered by the MSCI Emerging Markets index, the fund also includes 20% ex emerging market regions, including frontier markets.

Saldanha said Africa, Latin America and emerging Asia all offered growth opportunities.

In addition to European clients, Neuberger Berman hopes to attract pension fund investors in the Chilean, Peruvian and Asian markets.

Minimum investment is $2.5m (€1.8m).

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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