Neuberger Berman stood out for gatekeepers of private banks in Asia in a market where home bias dominates investment sentiment and HNWIs often prefer buying property in the region, not US REITs. Until recently, the American asset managers’ REIT offering was solely focused on the US market. Asian client demand was thin, but the firm’s selection as a distinguished provider is proof that platforms demand the option to remain available even if end-client demand is not always present.“In 2014, Asian investors largely missed the call on the US REIT market as they chased yields in other areas,” says Mark Serocold, Neuberger Berman’s director of business development in Asia, highlighting the FTSE NAREIT’s 28% annual gain, a decade-high surge.
“We were close to four years into the US property market recovery and US businesses were starting to carefully expand again. Demand for space was higher but there was no extra supply – exactly the dynamics you want to see when investing in REITs,” says Serocold. “In addition, many REITs had cleaned up their balance sheets and were even showing signs of growing their dividends again. Investors took note of the improving fundamentals and rewarded the sector accordingly.”
Neuberger Berman did not rest on its laurels and responded by expanding to cater to investor demand for global property exposure. In July last year, the 76-year old asset manager made two senior hires into the Global Real Estate Securities group: Anton Kwang joined the firm to cover Asia Pacific and Gillian Tiltman will oversee Europe.
“Even though Asian clients may not have invested significant amounts of assets in US REITs and views may have differed with ours, our conviction remained unchanged and we continued to communicate that message to private banks,” says Serocold.
Undeterred by the region’s lack of enthusiasm, US REITs are instead focused on the pursuit of best-in-breed products. Asia’s selectors have spoken and voted Neuberger Berman as the Best Fund Provider – REIT.