In the current market environment, HNWIs in the region wanting an extra basis point of yield – as they always do – will need to dabble in riskier credit, something they may not be inclined to do themselves. Neuberger Berman has responded with a headline move.In 2013, Neuberger Berman shocked the asset management community by recruiting 22 people to form its emerging market debt team, including 19 from a single competitor. In the two years since, the team has grown assets to more than US$4 billion and has gained the recognition of Asia’s fund selectors.
Neuberger Berman prides itself on bringing the firm to its clients. In an industry where fund managers are often disconnected with distributors and investors, Neuberger Berman did not let the distance between its base in the US and its clients in Asia restrict access, carrying out numerous visits to the region.
“I challenge anyone to have had as many [portfolio manager] visits to Asia as we have in the last few years,” says Mark Serocold, director of business development, Asia, Neuberger Berman. Serocold says that members of the emerging market team (excluding those based in Singapore) visited the region bi-monthly last year and the firm’s high-yield bond team visited almost every month.
Rather than chasing hot money and fashionable trends, Neuberger Berman remains focused on plans to launch more emerging market bond funds in the next three to six months – this time in Asian bonds. Its approach to product development is sound, long-term investing; a preference for an offering that can stand the test of a full market cycle. It is an alternative to stepping in and out of bull markets and the trading mentality private banks in Asia are attempting to persuade their clients to get involved in.
“We are confident that flows will return to emerging market bonds and when they do we will be well-positioned to serve our private banking clients,” says Serocold.
Gatekeepers at Asia’s private banks are acquainted with the buy-high, sell-low mentality of the region’s investors, and the difficulties of timing the market. But if the markets shifted today in the favour of emerging market bonds, Asian Private Banker’s poll indicates that Neuberger Berman, this year’s Best Fund Provider – Emerging Market Bond, will reap the benefits.