Neuberger Berman Global Thematic Equity FundThird Quarter 2018
For Professional Client Use Only
FIRM OVERVIEW
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
3
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
4
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
5
Global Perspective and Local Investment Presence
32 Cities
20 Countries
17 Portfolio Management Centers
600 Investment Professionals Worldwide
425 Client Professionals Worldwide Institutional $210
66%
Intermediary $56
18%
HNW $50
16%
AUM BY
CLIENT (bn)
Americas $220
70%
Europe/Middle
East $41
13%
Asia Pacific $55
17%
AUM BY
REGION (bn)
Portfolio management center
NEW YORK
ATLANTA
TAMPA
TORONTO
BOSTON
WEST PALM BEACH
CHICAGO
DALLAS
SAN FRANCISCO
LOS ANGELES WILMINGTON
BOGOTA
BUENOS AIRES
MADRID
DUBAI
SINGAPORE
MELBOURNE
SYDNEY
TOKYO
HONG KONG TAIPEI
SHANGHAI SEOUL
BEIJING
LONDON
MILAN
PARISFRANKFURTZURICH
THE HAGUE
LUXEMBOURG
Firm Headquarters
Europe, Middle East, Africa &
Latin America
Regional Headquarters
Asia Pacific
Regional Headquarters
ROME
As of September 30, 2018.
6
Investment Team Resources
Investors connected and supported by an integrated platform
1. As of August 31, 20182. Awarded “Best Buy-Side Trading Technology” at the 2016 Markets Choice Awards.
INVESTMENT TEAM
Professionals across public and private
markets, equity, fixed income and
alternatives
Connections through daily interactions and
proprietary tools
Portfolio managers and research analysts:
• 190 equity professionals
• 148 fixed income professionals
• 126 alternatives professionals
• 30 multi-asset class professionals
Dedicated Big Data analytics team
ESG data and proprietary ratings
27 risk management professionals
17 internal audit, and guideline monitoring
professionals
Breadth of Perspectives Research1 Independent Oversight1
419 client professionals across 32 cities 51 trading professionals across an award
winning platform2
Leading industry technology (e.g., Aladdin,
State Street, Charles River)
1,589 research meetings with company
management teams at our offices in 2017
Active engagement on material
environmental, social and
governance topics
Dedicated ESG Investing team
Client Relations1 Operating Platform1 Engagement
7
Environmental, Social and Governance Investing
ESG factors are considered by portfolio managers across the platform
* 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
• Extensive multi-asset engagement program, clear ESG policy and engagement principles, as well as comprehensive proxy voting guidelines, including industry-leading detail on E&S
issues through over 1,500 equity meetings hosted in our offices with another 750 solely in the fixed income space in 2017
• UN-supported Principles for Responsible Investment awarded Neuberger Berman A+ scores for ESG strategy, governance and integration across asset classes
ESG Integration Framework
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 investment criteria
based on a client’s values and
preferences
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
Sustainable Equity 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
Neuberger Berman
Investment Strategy
Examples
AVOID*
Supported by Active Engagement with Issuers to Influence Outcomes
8
GLOBAL THEMATIC EQUITIES
Global Thematic Equities Team
Experienced team of investors supported by NB’s centralized in-house research resources
_______________________As of September 30, 2018. Staffing is subject to change without notice
Daniel P. Paduano, CFA
Portfolio Manager
• Georgetown University BA
• NYU Stern School MBA
• 48 years industry experience
• Joined the firm in 1977
Sherrell J. Aston, Jr.
• Portfolio Manager
• University of Virginia BA
• Columbia University MBA
• 21 years industry experience
• Joined the firm in 1997
PADUANO GLOBAL THEMATIC STRATEGY
Jason H. VintiadisPortfolio Manager
• Middlebury College BA
• MIT Sloan School MBA
• 15 years industry experience
• Joined the firm in 2013
Maximiliano RohmPortfolio Manager
• Universidad Torcuato Di Tella
• MIT Sloan School MBA
• 15 years industry experience
• Joined the firm in 2006
TIMOTHY CREEDON
Managing Director, Neuberger Berman Global Equity Research Department
41 dedicated research professionals. Analysts average 18 years investment experience
CONSUMER ENERGY & UTILITIES HEALTH CARE OTHERFINANCIAL SERVICES TECHNOLOGY, MEDIA
& TELECOM
INDUSTRIALS &
MATERIALS
Consumer Staples
Jacob Gamerman
Consumer Discretionary
Kevin McCarthy
John San Marco
Asian Consumer
Discretionary
Baoying Zhai
Pharma/Biotech
Terri Towers
Eric Boland
Health Care Services
Ari Singh
Macro Strategies
Raheel Siddiqui
Special Situations
Jonathan Shahrabani
Grant Parker
Thematic Research
Saurin Shah
Big Data
Mike Recce
Kai Cui
Liyi Li
Yang Zhou
Utilities/Infrastructure
Ronald Silvestri
Energy
Todd Heltman
Jeff Wyll
Matthew Lipton
Banks/Brokers/Insurance
Michelle Giordano
Kush Goel
Jingjing Xu
Cards/Exchanges
Scott Woodcock
Business Services
Charles Murphy
Asian Financials/
Property
Alan Tsang
Hardware/Semiconductors
Michael DiTillio
Daniel Flax
Software/IT Services
Hari Srinivasan
Andre Chan
Telecom/Media
John Carr
Asian Technology,
Media & Telecom
Yan Taw (YT) Boon
Fan Liu
Hank Hsu
Kento Sugimoto
Industrials
Martin Sankey
Michael Barr
John Hirt
Materials
Marisa Hernandez
Jared Mann
Jim Tyre
Asian Industrials
Leo Lin
For Professional Client Use Only 10
Why Neuberger Berman for Global Thematic Equities
An experienced team with a differentiated approach
• Dedicated to Global Thematic Equities strategy since 1991
• Investment team averages 25 years of experience, led by Dan Paduano, a pioneer in thematic investing
• Leverage Neuberger Berman investment platform, including the Neuberger Berman Global Equity Research Department
EXPERIENCED TEAM
LEVERAGING
NB PLATFORM
• Thematic approach results in differentiated portfolio: ~96% active share over last 5 years
• High conviction portfolio of typically 20-30 thoroughly researched companies
• Defensive growth profile, delivering attractive risk adjusted returns across different market environments
DIFFERENTIATED,
HIGH-CONVICTION
PORTFOLIO
• Long term oriented investors – annual turnover of ~25%
• Team is significantly invested alongside clients
• All four investment team members are shareholders of Neuberger Berman
PATIENT
AND
ALIGNED
WITH INVESTORS
_______________________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.
For Professional Client Use Only 11
Fund Snapshot
Thematic orientation underpinning an unconstrained, high conviction approach
_______________________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. All information is current as of the date of this material and is subject to change without notice.
• Positions portfolio in the way of powerful secular shifts
• Themes provide visibility and predictability in an uncertain world
• Focuses attention on the signal and away from the noise
• Global applicability is a defining characteristic of our themes
• Best in class companies are located around the world
• Leading corporations come in all sizes
• Scale can be an advantage: both large and small
• High conviction investments with long term horizon
• Typically 20-30 investments: diminishing effect of diversification beyond 25
• High active share & differentiation
• Our Themes are inherently environmentally and socially informed
• Forward looking organizations embrace ESG principles
THEMATIC
GLOBAL
ALL CAP
HIGH CONVICTION
ESG
(SOCIALLY RESPONSIBLE)
For Professional Client Use Only 12
Rationale for Thematic Approach
Global Population Aged 80+ Evolution Forecast (in Millions)
32
102
161
395
1975 2009 2025E 2050E
Global Middle Class Evolution Forecast (in Millions)
3,030
3,766
4,617
5,412
2015 2020E 2025E 2030E
_______________________Source: United Nations. Brookings. CISCO VNI Mobile, 2017.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. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice.
Water Demand & Supply Gap Analysis (Bm3) Global Mobile Data Traffic Forecast (in Exabytes per Month)
711
17
24
35
49
2016 2017E 2018E 2019E 2020E 2021E
Themes provide visibility and predictability in an uncertain world
For Professional Client Use Only 13
Representative Account Themes Overview
_______________________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. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. The data shown is of a representative account, is for informational purposes only and is not indicative of future portfolio characteristics. Actual results may vary due to specific client guidelines and other factors.
Themes position portfolio in the way of secular shifts, enhancing visibility, predictability and focus
For Professional Client Use Only
HOLDINGS THESIS HOW TO PLAY
Corning (GLW), EBAY (EBAY), Fedex (FDX), Delta (DAL),
Expedia (EXPE), PayPal (PYPL), Alibaba (BABA)
New habits and technology transforms how the global
middle class consumes. 3+ billion people consume 66%+
of global consumption.
Goods and services for emerging consumers; "experiences
over things"; enablers of digital and mobile transactions.
Alphabet (GOOGL), Nice Systems (NICE), Thomson Reuters
(TRI), Western Digital (WDC), Microsoft (MSFT), Symantec
(SYMC), Inovalon (INOV)
Exponentially growing data requires smart systems to
enable advanced decisioning by humans and robotic
systems.
Developers of software and/or systems that enable advanced
analytics: making data intelligent
Amdocs (DOX), Corning (GLW), Texas Instruments (TXN),
Thomson Reuters (TRI), Western Digital (WDC), Microsoft
(MSFT), ASM Lithography (ASML), GTT Communications (GTT)
Anytime, anywhere connectivity is finally here and is
transforming media.
Systems and software developers that enable anytime
anywhere any device connectivity (voice, video, data).
Quanta Services (PWR), Cabot Oil & Gas (COG)Global energy infrastructure fails to meet growing
demand.
Enablers of distribution and delivery of hydrocarbons &
electricity to the point of consumption.
TE Connectivity (TEL), Allegheny Technologies (ATI)Global energy imbalances require of greater efficiencies --
do more with less -- to improve economics.
Developers of technologies and services that allow all of us to
do more with less.
Tetra Tech (TTEK)Water is increasingly scarce & inaccessible; very true in
high demand areas.
Water treatment, recycling, conservation & transportation
businesses.
Providence Service (PRSC), Inovalon (INOV), Aon (AON) and
Perrigo (PRGO), Stericycle (SRCL)
Extended life expectancies to require increased
medications & care.
Developers of healthcare products & services for an aging
population.
Pets-at-Home (PETS-GB)
Pets increasingly common among baby boomers (now
with empty nests) & millennials (single & career-focused),
the two largest age cohorts in developed economies.
Providers of animal medical treatment, nutrition and other
services.
Scholastic (SCHL)
Education is critical to progress and advancement, and so
individuals, businesses and policy makers are
increasingly investing in education.
Enablers of higher quality, lower cost education, both for
individuals and employees.
14
Evolution of Themes
Themes are intended to span many years and evolve naturally rather than suddenly change
• In the late 90s the hype of new business
development and legacy model evolutions
enabled by interconnectivity got ahead of the
reality of the technology
• Significant investment in systems, software
and devices necessary to actualize voice,
video and data, anytime, anywhere on any
device
PERSONALIZATION OF MEDIA EMERGING GLOBAL CONSUMER
• Global economic growth and
industrialization was leading to increased
prosperity across a number of emerging
markets, underpinning an emerging
consuming class
• Natural migrations from the village to the
city and transitions from the bicycle to the
scooter to the car drove demand for the
gamut of consumer products and an
increasing number of services
RISING VALUE OF OIL & GAS
• WTI at $13-$15 in late 90s; well below
marginal cost
• EM growth drove oil demand higher
beyond available supply
• We anticipate price would increase
towards cost to produce
SMART SYSTEMS
EVOLVING GLOBAL CONSUMER
ENERGY EFFICIENCY
• 2010 Apple introduces the iPad, Vodafone
and Verizon introduce 3G wireless broadband
connectivity - ubiquitous access and anytime,
anywhere connectivity finally available
• Exponentially growing data requires smart
systems to enable advanced decisioning by
humans and robotic systems
• Consumption is evolving fueled by
technology, digitization and a maturing
consuming class
• Global consumers increasingly focused
on experiences and leveraging
technology to enhance consumption
• Global energy imbalances and the
economic benefits of efficiency drive an
increased emphasis on alternatives,
renewables and conservation
2000s
2010s
2020s
2000s
2010s
2020s
ENERGY INFRASTRUCTURE
• Rising global demand drove E&P beyond
the limits of historically reliable basins
• ‘New’ oil from deep water & shale
required pipelines, storage, equipment &
services to reach end markets
_______________________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.
For Professional Client Use Only 15
From Themes to Investments
Highly selective on businesses with a focus on return potential and rigorous risk management
_______________________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.
BUSINESSESRISK
MANAGEMENT
THEMES
TYPICALLY
20-30 STOCKS• Prefer Enablers –
companies that enable
technologies, goods and
services
• Disciplined valuation is a
critical aspect of return
potential (focus on FCF/Shr,
revenue growth, margin
improvements, & capital
structure)
• Focused portfolio with strict
construction guidelines (at
theme & holdings level)
• Multiple Themes enhance
diversification
• Independent Risk Mgmt at NB
monitors risk
• Thematic approach enhances
visibility & predictability
• Secular shifts provide a signal through
the noise
• Enable the portfolio to transcend
cyclicality
For Professional Client Use Only 16
NEUBERGER BERMAN GLOBAL THEMATIC EQUITY FUND
Neuberger Berman Global Thematic Equity Fund Summary Terms
Investment Manager Neuberger Berman Europe Limited
Sub – Investment Manager Neuberger Berman Investment Advisers LLC
Inception Date April 27, 2018
Investment Objective & Strategy
Seeks to achieve long-term capital appreciation through investment in a portfolio of equity holdings that are exposed to
global long-term themes.
Bottom up thematic focused strategy investing in 20-30 global stocks.
Tracking Error ~5%
Fees Class I USD Acc: 1.00%
Maximum TER Class I USD Acc: 1.30%
Minimum Subscription Class I USD Acc: USD 2,500,000
Fund Codes CUSIP: G6430T809
ISIN: IE00BFMHRK20
Benchmark MSCI World(Net) Index
Base Currency US Dollars
For Professional Client Use Only
_______________________Fees as latest available Prospectus. Please check with your Neuberger Berman representative to see if these share classes are available at this time.
18
Balanced thematic exposures inform our agnostic approach to size and geography
Fund Overview
Top 20 Holdings
_______________________Source: Neuberger Berman. Data as of 9/30/2018. Fund information (characteristics, holdings, weightings, etc.) is subject to change without notice. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
Thematic Distribution1
For Professional Client Use Only
Holding
Portfolio
Weight Business Domicile Theme
Inovalon 4.8 Healthcare Tech USA Health & Wellbeing
Amdocs 4.7 IT Services Israel Personalization of Media
Symantec 4.6 Security Software USA Smart Systems
Western Digital 4.4 Tech Hardware USA Personalization of Media
Pets At Home 4.4 Specialty Retail UK Humanization of Pets
Quanta Services 4.4 Construction & Engineering USA Energy Efficiency
GTT Comm. 4.3 IT Services USA Personalization of Media
Perrigo 4.2 Pharmaceuticals Ireland Health & Wellbeing
Scholastic 4.1 Media USA Education
Providence Srvs 4.1 Healthcare Services USA Health & Wellbeing
Allegheny Tech 4.0 Specialty Materials USA Energy Efficiency
Stericycle 4.0 Commercial Services USA Health & Wellbeing
Cabot Oil & Gas 4.0 Oil & Gas Production USA Energy Infrastructure
Aon Plc 3.9 Insurance Services UK Health & Wellbeing
Thomson Reuters 3.9 Information Services Canada Personalization of Media
Ebay 3.8 E-Commerce USA Evolving Global Consumer
Alphabet 3.8 Tech USA Smart Systems
Delta Air Lines 3.7 Travel USA Evolving Global Consumer
TE Connectivity 3.6 Tech Hardware Switzerland Energy Efficiency
Expedia Group 3.1 Online Travel USA Evolving Global Consumer
TOTAL 81.8%
Health & Wellbeing
21%
Smart Systems18%
Personalization of Media
16%
Evolving Global Consumer
16%
Energy Infrastructure
9%
Energy Efficiency
7%
Humanization of Animals
5%
Education5%
Rising Value of Water
3%
19
Low holdings overlap with benchmark* complements well with most equity investment programs
Fund Differentiation
Fund Top Holdings vs Benchmark* Weight (%) Benchmark* Top Holdings vs Fund Weight (%)
_______________________Source: Neuberger Berman. Data as of 9/30/2018. (*) Benchmark: MSCI World Index. Fund information (characteristics, holdings, weightings, etc.) is subject to change without notice. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
For Professional Client Use Only
Holding Portfolio Weight
Benchmark
Weight
Portfolio Over
/ (Under)
Inovalon 4.8 0.0 4.8
Amdocs 4.7 0.0 4.7
Symantec 4.6 0.0 4.6
Western Digital 4.4 0.0 4.4
Pets At Home 4.4 0.0 4.4
Quanta Services 4.4 0.0 4.4
GTT Comm. 4.3 0.0 4.3
Perrigo 4.2 0.0 4.2
Scholastic 4.1 0.0 4.1
Providence Srvs 4.1 0.0 4.1
Allegheny Tech 4.0 0.0 4.0
Stericycle 4.0 0.0 4.0
Cabot Oil & Gas 4.0 0.0 4.0
Aon Plc 3.9 0.1 3.8
Thomson Reuters 3.9 0.0 3.9
Ebay 3.8 0.1 3.7
Alphabet 3.8 0.9 2.9
Delta Air Lines 3.7 0.0 3.7
TE Connectivity 3.6 0.1 3.5
Expedia Group 3.1 0.0 3.1
TOTAL 81.8 1.2
Holding Index Weight Portfolio Weight
Portfolio Over /
(Under)
Apple 2.7 0.0 -2.7
Microsoft 2.0 0.0 -2.0
Amazon.com 2.0 0.0 -2.0
Alphabet 1.8 3.8 -2.0
Facebook 0.9 0.0 -0.9
JPMorgan Chase 0.9 0.0 -0.9
Johnson & Johnson 0.9 0.0 -0.9
Exxon Mobil 0.9 0.0 -0.9
Bank of America 0.7 0.0 -0.7
Berkshire Hathaway 0.7 0.0 -0.7
Visa 0.6 0.0 -0.6
Nestle 0.6 0.0 -0.6
Pfizer 0.6 0.0 -0.6
UnitedHealth Group 0.6 0.0 -0.6
AT&T 0.6 0.0 -0.6
Wells Fargo 0.6 0.0 -0.6
Home Depot 0.6 0.0 -0.6
Chevron 0.6 0.0 -0.6
Cisco Systems 0.5 0.0 -0.5
Verizon Communications 0.5 0.0 -0.5
TOTAL 19.3 3.8
20
$5
$20
$35
12/06 04/09 08/11 12/13 03/16 07/18
‘Enablers’: Corning (GLW)
Corning innovations ‘enable’ ubiquitous connectivity, next-gen mobility, cleaner emissions and safer
pharmaceuticals
• Theme: Evolving Global Consumer, Personalization of Media
• Anytime, anywhere connectivity is driving demand for
innovative, efficient displays as well as optimal connectivity
• Corning is a leader & innovator in displays, fiber, and more
recently focused on next-gen automotive windows & displays,
and drug packaging solutions
• Headquarters: USA
• Founded: 1851
• Market Cap: $27B
Potential in fiber & glass
more evident in 2H13
Began investing in 2008
thru 2012
Stock Price Evolution
Corning
In 4Q15 started
aggressive share
repurchase & dividend
program
Recognition
for
leadership in
next gen
mobility
For Professional Client Use Only
_______________________As of Sept. 30, 2018
21
$20
$70
$120
06/11 11/12 04/14 09/15 02/17 07/18
‘Enablers’: NICE Systems (NICE)
Global software developer ‘enabling’ enterprises to deliver efficient, personalized consumer experiences
• Theme: Smart Systems
• Big Data is driving better decision making across
corporations globally
• NICE is a leading software developer that enables
businesses to better engage with customers and comply with
regulatory requirements
• Headquarters: Israel
• Founded: 1986
• Market Cap: $25B
Began investing in 2H12 with
data analytics more prevalent
NICE grew FCF
3x since 2012/13
NICE Systems
Stock Price Evolution
For Professional Client Use Only
_______________________As of Sept. 30, 2018
22
Long-Term: Tetra Tech (TTEK)
Patience and conviction measured by Tetra Tech investment
• Theme: Rising Value of Water
• Water scarcity is a major global risk (ranked among Top 3 by
World Economic Forum consistently since 2012) so water
related investments should continue to grow
• Tetra Tech is a global leader in consulting services related to
water infrastructure projects
• Headquarters: USA
• Founded: 1966
• Market Cap: $3.8B
$15
$30
$45
$60
01/10 09/11 06/13 02/15 11/16 07/18
Began position in 2011
and added in 2015
Awareness raised with US
Gov’t infrastructure
spending plans
Stock Price Evolution
Tetra Tech
For Professional Client Use Only
_______________________As of Sept. 30, 2018
23
$0
$700
$1,400
08/04 05/07 03/10 12/12 10/15 07/18
Valuation Discipline: Alphabet (GOOGL)
Ownership mentality requires strict, through-cycle, quantitative discipline
• Theme: Smart Systems
• Software developers that help make data intelligent should
benefit in exponentially growing data environment
• Alphabet is a leader in online advertising, search (Google) &
cloud computing; vast data assets to develop smart tools such
as AI and autonomous driving
• Headquarters: USA
• Founded: 1998
• Market Cap: $870B
Followed since 2004
IPO but valuation
generally excessive
Stock Price Evolution
Alphabet
Invested
during 2011
Euro Crisis
when free
cash flow
yield peaked
GOOGL grew
FCF almost
3x since
2010/11
For Professional Client Use Only
_______________________As of Sept. 30, 2018
24
Fund Highlights
KEY TAKEAWAYS BENEFITS TO INVESTORS
THEMATICALLY DRIVEN APPROACH VISIBILITY & PREDICTABILITY
DOMICILE & CAPITALIZATION AGNOSTIC RETURNS CENTRIC PHILOSOPHY
HIGH CONVICTION VALUATION DISCIPLINE & MANAGEMENT
ENGAGEMENT
PREFER ENABLERS HELP MITIGATE RISKS
DIFFERENTIATED PORTFOLIO COMPLETE OR COMPLEMENTARY PROGRAM
MULTI THEMATIC PRESERVES THROUGH CYCLE FLEXIBILITY
EXPERIENCED & ALIGNED TEAM REPEATABLE PROCESS
PERSONALLY INVESTED
Investors benefit from our time tested approach in a series of ways
_______________________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.
25
Outlook for 2018: Optimism with glints of Euphoria
MACRO: PROS
• Global growth firmed and improving
• Healthy balance sheets and ample liquidity
• Corporate capital spending and hiring intentions rising
• Governments worldwide incentivizing investment
MACRO: CONS
• Geopolitical tensions remain
• Federal fiscal deficits again on the rise
• Central banks ending accommodative policy
• Elevated business valuations in public and private markets
WATER
Climate concerns driving increased
spending on water related projects
Danone, Nestle and 600+ other
large companies spent over $23bn
in water related projects in 2016
The UN estimates $6.4tn need to be
spent in water related projects over
next 20 years
SMART SYSTEMS
Global data will more than double
by 2020, growing from ~800 to
1,100 exabytes, just in 2018
Big Data is transforming industries
with tens of billions spent annually
US companies absorbed 65% of big
data investments; China ~15%
ENERGY
INFRASTRUCTURE
In 3Q17 Pipeline Monthly Backlog
Indicators hit a new record high
In 2018 $22bn+ of Large Pipeline
projects and $27bn of Electrical
Transmission projects are
scheduled to proceed in North
America
EVOLVING
CONSUMER
Online spending estimated at
~$2,5tn in ‘18, up ~$300bn from ‘17
1.8bn online consumers, including
130m new consumers
50% spent from mobile devices
DOGMATIC VALUATION DISCIPLINE SERVES AS OUR HEDGE
“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”
John Templeton
_______________________Source: Western Digital Corp, McKinsey Research report, Baird Research, Keystone Capital Markets, The C, Three Group, Invesp, Deloitte, Bureau of Labor Statistics.This material is intended as a broad overview of the Portfolio Managers’ style, philosophy and process and is subject to change wi thout notice. Portfolio Managers’ views may differ from those of other Portfolio Managers as well as the views of the firm.
For Professional Client Use Only 26
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.
Concentration Risk: The fund's investments may be concentrated in a small number of investments and its performance may therefore be more variable than the performance of a
more diversified 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. If the currency of the fund is different from your local currency, then you should be aware that due to exchange rate fluctuations the performance shown may increase or
decrease if converted into your local currency..
.
For Professional Client Use Only 27
NEUBERGER BERMAN THEMATIC GLOBAL ALL CAP COMPOSITE
0
5,000
10,000
15,000
20,000
25,000
30,000
1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2018
PAM Paduano Thematic Global All Cap TPG PAM Paduano Thematic Global All Cap EOG S&P 500 Tot MSCI World Index - Net Return
Performance and Portfolio Characteristics
Source: Neuberger Berman, FactSet. (*) Data as of September 30, 2018. EOG = Equity Only (gross of fees).
Past performance is no guarantee of future results. Please refer to the attached GIPS® compliant composite presentations for complete performance information. Equity only (EO) performance excludes the performance
of the cash and or fixed income instruments that may also be held in the portfolio. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. The results illustrate the
growth of a hypothetical investment in the composite and index as of the date indicated and assume reinvestment of any dividends and distributions. Results shown are hypothetical and do not represent the returns of any particular
investment. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Portfolio information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes
are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
Dot Com Boom and Bust
Financial Crisis
Paduano Global Thematic Strategy – Performance Overview*
2,337%Cumulative Paduano EOG return
(Since Inception)
96%Active Share vs MSCI World (Net)
For Professional Client Use Only
YTD 2017 2016 3 Years 5 YearsSince
Inception
Total Portfolio Return (%, Gross) 1.53 25.6 14.9 14.5 10.9 10.7
Total Portfolio Return (%, Net) 0.69 24.2 13.6 13.2 9.7 9.4
Equity Only Return (%, Gross) 1.51 28.3 17.1 16.2 12.0 12.2
MSCI World Net (%) 5.43 22.4 7.5 13.5 9.3 7.7
Excess Return (%) -3.93 5.9 9.6 2.6 2.7 4.5
Volatility: Portfolio / MSCI World Net -- -- -- 10.1 / 9.0 10.3 / 9.5 13.7 / 14.2
Tracking Error (%) -- -- -- 5.7 5.2 6.7
Information Ratio (%) -- -- -- 0.17 0.32 0.44
Correlation (R-squared) / Beta -- -- -- 83.0 / 0.9 87.0 / 0.9 88.0 / 0.9
Up / Dn Capture (%) -- -- -- 105.2 / 98.2 109.6 / 96.5 88.5 / 98.1
29
Performance in Challenging Environments
_______________________Sources: Neuberger Berman. EOG = Equity Only (gross of fees). Past performance is no guarantee of future results. Please refer to the attached GIPS® compliant composite presentations for complete performance information. Equity only (EO) performance excludes the performance of the cash and or fixed income instruments that may also be held in the portfolio. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Portfolio information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
Dot Com Boom and Bust Financial Crisis
Thematic approach & valuation discipline promoted focus & patience in challenging market environments
For Professional Client Use Only
31.1
4.1 0.7
41.1
4.7 1.2
24.9
(13.2)(16.8)
21.0
(9.1)(11.9)
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
1999 2000 2001
Paduano Thematic Global All Cap (TPG) Paduano Thematic Global All Cap (EOG)
MSCI World Index S&P 500 Index
3-Year Total Return
Paduano Thematic Global All Cap (TPG): 37.4%
Paduano Thematic Global All Cap (EOG): 49.6%
MSCI World Index: -9.8%
S&P 500: -3.1%
12.8
(37.4)
44.5
13.6
(46.0)
49.3
9.0
(40.7)
30.0
5.5
(37.0)
26.5
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
2007 2008 2009
Paduano Thematic Global All Cap (TPG) Paduano Thematic Global All Cap (EOG)
MSCI World Index S&P 500 Index
3-Year Total Return
Paduano Thematic Global All Cap (TPG): 2.0%
Paduano Thematic Global All Cap (EOG): -8.4%
MSCI World Index: -16.0%
S&P 500: -16.0%
30
Flexible, Market Cap Agnostic Mandate
Leading businesses come in all shapes and sizes; market cap flexibility broadens opportunity set
Portfolio Allocation by Market-cap1 3 Year Attribution by Market Cap2
5 Year Attribution by Market Cap2
_______________________Source: Neuberger Berman. 1. Data as of December 31, 2017. 2. Data as of September 30, 2018. EOG = Equity Only (gross of fees). Past performance is no guarantee of future results. Please refer to the attached GIPS® compliant composite presentations for complete performance information. Equity only (EO) performance excludes the performance of the cash and or fixed income instruments that may also be held in the portfolio. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Portfolio information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
For Professional Client Use Only
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Large Cap Mid Cap Small Cap Cash
Allocation Effect Selection + Interaction Total Effect
$50B+ -0.74 8.56 7.83
$20-50B -0.02 2.35 2.34
$10-20B -0.12 1.40 1.27
$5-10B -0.26 1.89 1.62
$2-5B 0.60 -2.34 -1.74
$0-2B 10.07 -8.66 1.41
Cash -0.63 -- -0.63
NA -0.06 -0.06 -0.12
Total 8.84 3.14 11.98
Allocation Effect Selection + Interaction Total Effect
$50B+ -1.05 14.11 13.06
$20-50B 0.26 7.34 7.60
$10-20B -0.10 1.08 0.98
$5-10B -0.14 5.91 5.78
$2-5B -2.83 7.99 5.16
$0-2B -9.68 11.78 2.10
Cash -0.11 -- -0.11
N/A -0.17 0.08 -0.09
Total -13.80 48.29 34.49
31
Performance Ranking by Theme
Annual Performance Ranking by Theme
A multi-theme approach is beneficial as it enhances portfolio diversification
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
ENERGY
INFRASTRUCTURESMART SYSTEMS
PERSONALIZATION
OF MEDIA
EMERGING GLOBAL
CONSUMERSMART SYSTEMS
HEALTH &
WELLBEING
PERSONALIZATION
OF MEDIA
PERSONALIZATION
OF MEDIASMART SYSTEMS
PERSONALIZATION
OF MEDIA
EMERGING GLOBAL
CONSUMER
HEALTH &
WELLBEINGOTHER
EMERGING GLOBAL
CONSUMER
PERSONALIZATION
OF MEDIAEDUCATION
PERSONALIZATION
OF MEDIA
HEALTH &
WELLBEING
HEALTH &
WELLBEING
HEALTH &
WELLBEINGENERGY EFFICIENCY
PERSONALIZATION
OF MEDIA
RISING VALUE OF
OIL & GASEDUCATION
HEALTH &
WELLBEING
HEALTH &
WELLBEING
RISING VALUE OF
WATER
EMERGING GLOBAL
CONSUMER
EMERGING GLOBAL
CONSUMERSMART SYSTEMS
HUMANIZATION OF
PETSSMART SYSTEMS
HEALTH &
WELLBEING
RISING VALUE OF
WATER
RISING VALUE OF
OIL & GAS
ENERGY
INFRASTRUCTURE
RISING VALUE OF
WATER
HUMANIZATION OF
PETSEDUCATION SMART SYSTEMS
HUMANIZATION OF
PETS
RISING VALUE OF
WATER
ENERGY
INFRASTRUCTUREENERGY EFFICIENCY
PERSONALIZATION
OF MEDIA
HUMANIZATION OF
PETSENERGY EFFICIENCY
HUMANIZATION OF
PETSOTHER
ENERGY
INFRASTRUCTUREEDUCATION ENERGY EFFICIENCY OTHER
RISING VALUE OF
WATERSMART SYSTEMS
EDUCATION ENERGY EFFICIENCYRISING VALUE OF
WATER
RISING VALUE OF
OIL & GAS
RISING VALUE OF
OIL & GAS
HUMANIZATION OF
PETS
HUMANIZATION OF
PETSEDUCATION
RISING VALUE OF
OIL & GASEDUCATION
HUMANIZATION OF
PETS
EMERGING GLOBAL
CONSUMER
EMERGING GLOBAL
CONSUMER
HUMANIZATION OF
PETSENERGY EFFICIENCY ENERGY EFFICIENCY
RISING VLAUE OF
WATERENERGY EFFICIENCY OTHER
PERSONALIZATION
OF MEDIA
EVOLVING GLOBAL
CONSUMER
ENERGY
INFRASTRUCTURE
OTHERHEALTH &
WELLBEINGEDUCATION
ENERGY
INFRASTRUCTURE
ENERGY
INFRASTRUCTUREENERGY EFFICIENCY
ENERGY
INFRASTRUCTURE
RISING VALUE OF
OIL & GAS
ENERGY
INFRASTRUCTURE
HUMANIZATION OF
PETS
RISING VALUE OF
WATER
HUMANIZATION OF
PETS
RISING VALUE OF
WATEROTHER SMART SYSTEMS
EMERGING GLOBAL
CONSUMERSMART SYSTEMS
RISING VALUE OF
OIL & GAS
RISING VALUE OF
WATEREDUCATION OTHER OTHER
ENERGY EFFICIENCYPERSONALIZATION
OF MEDIA
RISING VALUE OF
OIL & GASOTHER
PERSONALIZATION
OF MEDIAOTHER
RISING VALUE OF
WATER
ENERGY
INFRASTRUCTURE
EMERGING GLOBAL
CONSUMER
RISING VALUE OF
OIL & GAS
RISING VALUE OF
OIL & GAS
SMART SYSTEMSENERGY
INFRASTRUCTURESMART SYSTEMS EDUCATION
HEALTH &
WELLBEING
RISING VALUE OF
OIL & GASOTHER
EMERGING GLOBAL
CONSUMERENERGY EFFICIENCY
HEALTH &
WELLBEINGEDUCATION
_______________________Source: Neuberger Berman. As of December 31, 2017. EOG = Equity Only (gross of fees). Past performance is no guarantee of future results. Please refer to the attached GIPS® compliant composite presentations for complete performance information. Equity only (EO) performance excludes the performance of the cash and or fixed income instruments that may also be held in the portfolio. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. Results shown are hypothetical and do not represent the returns of any particular investment. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Portfolio information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
For Professional Client Use Only 32
NEUBERGER BERMAN THEMATIC GLOBAL ALL CAP REPRESENTATIVE ACCOUNT
Potential Benefits of Multi-Thematic Approach
Different themes contribute to portfolio returns over time
Theme Contribution to Return – 2017 (%) Theme Contribution to Return – Last 5 Years (%)
_______________________Source: Neuberger Berman. As of December 31, 2017. EOG = Equity Only (gross of fees). Past performance is no guarantee of future results. Equity only (EO) performance excludes the performance of the cash and or fixed income instruments that may also be held in the portfolio. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. Results shown are hypothetical and do not represent the returns of any particular investment. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Representative account information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal. The data shown is of a representative account, is for informational purposes only and is not indicative of future portfolio characteristics. Actual results may vary due to specific client guidelines and other factors.
6.2
5.8
5.7
5.0
4.5
0.5
0.4
0.4
0.0
-1.3
Emerging Global Consumer
Personalization of Media
Health & Wellbeing
Alternatives, Conservation and Efficiency
Smart Systems
Pets
Energy Infrastructure
Rising Value of Water
[Cash]
Education
33.0
27.2
20.5
10.4
10.0
6.9
3.7
2.2
2.1
0.3
0.2
0.0
Personalization of Media
Smart Systems
Health & Wellbeing
Emerging Global Consumer
Alternatives, Conservation and Efficiency
Pets
Rising Value of Water
Education
Energy Infrastructure
Rising Value of Oil & Gas
Disintermediation of Financial Services
[Cash]
For Professional Client Use Only 34
Holdings Contribution to Investor Returns
Multiple holdings contributed to returns over time
Holding Contribution to Return – 2017 (%) Holding Contribution to Return – Last 5 Years (%)
_______________________Source: Neuberger Berman. As of December 31, 2017. EOG = Equity Only (gross of fees). Past performance is no guarantee of future results. Equity only (EO) performance excludes the performance of the cash and or fixed income instruments that may also be held in the portfolio. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. Results shown are hypothetical and do not represent the returns of any particular investment. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Representative account information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal. The data shown is of a representative account, is for informational purposes only and is not indicative of future portfolio characteristics. Actual results may vary due to specific client guidelines and other factors.
2.8
2.6
2.1
1.8
1.7
1.7
1.6
1.3
1.3
8.0
2.5
All Other
Microsoft
NICE Ltd
Texas Instruments
TE Connectivity
Western Digital
Corning
Providence Service
Dominion Diamond
Allegheny Tech
Paypal 12.2
9.1
8.3
6.8
5.6
5.4
5.1
5.1
4.6
45.5
8.8
All Other
Covidien
Microsoft
West Pharmaceutical
ARRIS International
NICE Ltd
Charles River Lab
VCA Inc
Texas Instruments
Corning
Alphabet
For Professional Client Use Only 35
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Consumer Discretionary Consumer StaplesEnergy FinancialsHealth Care IndustrialsInformation Technology MaterialsTelecommunication Services Utilities
Portfolio Allocation: Themes (vs Sectors)
Themes Evolution Sector Evolution
Themes are intended to span many years and evolve naturally rather than suddenly change
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cash Smart SystemsRising Value of Water Rising Value of Oil & GasPets Personalization of MediaOther Health & WellbeingEnergy Infrastructure Emerging Global ConsumerEducation Disintermediation of Financial ServicesAlternatives, Conservation and Efficiency
_______________________Source: Neuberger Berman. Data as of 12/31/2017.Past performance is no guarantee of future results. For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Representative account information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal. The data shown is of a representative account, is for informational purposes only and is not indicative of future portfolio characteristics. Actual results may vary due to specific client guidelines and other factors.
For Professional Client Use Only 36
Portfolio Allocation: Regions
Themes are global in nature with best in class businesses located around the world.
Portfolio Revenue Regional Breakdown2Portfolio Allocation by Region1
_______________________Source: Neuberger Berman. 1. Data as of December 31, 2017. 2. Data as of September 30, 2018. Past performance is no guarantee of future results. For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Representative account information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal. The data shown is of a representative account, is for informational purposes only and is not indicative of future portfolio characteristics. Actual results may vary due to specific client guidelines and other factors.
For Professional Client Use Only
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
ROW USA Cash
As of 9/30/2018
Rest of the World
44.1%
North America
56.0%
37
INVESTMENT PROCESS
Investment Process
A disciplined investment approach that seeks to translate secular global trends into compelling
portfolio strategies
QUANTITATIVE
SCREENING
• Screen for high return on
equity, cash flow strength
and favorable earnings
prospects
• Evaluate statistical
metrics
• Integrate valuation
analysis and fundamental
research to form risk /
return profile
QUALITATIVE BUSINESS
ANALYSIS
• Conduct in-depth
research and analysis of
company/business
models, quality of
management, competitive
strength and record of
success
• Identify best in class
managements
demonstrating leadership
that encompasses the
environment, workplace
and community
TRANSACTION
DISCIPLINE
• Determine catalysts that
lead to investment action
• Recognize that entry point
is a key determinant of
downside risk
• Seek companies with
50%–100% appreciation
potential over three to five
years
RISK
MANAGEMENT
• Emphasize valuation
based portfolio controls
• Evaluate liquidity of target
equity
• Maintain position limits to
enforce diversification
• Retain cash if lacking an
attractive opportunity
IDENTIFY SECULAR
THEMES
• Forecast tomorrow’s
forecast
• Examine the broad
changes and trends
affecting societies,
economies and industries
• Draw heavily on our own
“out-of-the-box” research
efforts and firm’s
centralized research
group
• Themes are not about
fads. A theme has the
potential for long-term
influence
_______________________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.
FOCUSED
PORTFOLIO
7-8 themes, maximum
thematic exposure of
20%, emphasizing
valuation
For Professional Client Use Only 39
Identify Secular Themes
Forecast tomorrow’s forecast
_______________________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.
• Readings: journals,
periodicals, books and
papers devoted to how the
world works
• Interaction with field
experts, thought leaders,
and policy makers
THINK AWAY
FROM WALL STREET
WHY THE THEMATIC
APPROACH?
• Creates parameters for
our scope
• Adds visibility and
predictability to an
uncertain world
• Provides a signal
through the noise
DISCOVER
LASTING CHANGE
• Characterize the contours
of the world in which we
live
• Evaluate demographic,
societal, technological
and political shifts
• Identify dominant global
themes with a minimum
of five to seven years of
visibility
For Professional Client Use Only 40
Characterizes end market competitive
dynamics; a company’s total and served
markets; and secular/cyclical phases
Framing the cycles is critical to properly
timing the secular. We work with
independent consultants and analysts to
help us understand the global picture
from the top down.
Understand business model, execution
strategy and customer value proposition –
determine source/sustainability of
competitive advantage – quantify potential
ROIC and earnings power for the business
Track record of success – alignment of
management’s economic interest with
common shareholders – communication
with shareholders
POTENTIAL PORTFOLIO
CANDIDATES
Utilizing our dedicated team and the Neuberger Berman Global Equity Research Department
resources to find and evaluate the potential beneficiaries of our core themes.
Macro
Research
Industry
Research
Company
Research
Management
Profile
Qualitative and Quantitative Analysis
IDEA GENERATION
AND RESEARCH
• Price to earnings
• Enterprise value to EBITDA
• Free cash flow yield
• Return on equity
• Price to book value
EVALUATION PARAMETERS
LEVERAGE INSIGHTS OF NEUBERGER BERMAN
GLOBAL EQUITY RESEARCH DEPARTMENT
• Our thematic construct aims to capture
large secular shifts around the world,
inherently geared towards creating a
positive impact on society.
• Forward thinking companies are in tune
with environmental, social and
governance issues.
• Our themes have led us away from
alcohol, gaming, firearms and coal
companies among other negative
contributors to society.
• 34 research analysts, average 18 years
experience, in-depth knowledge of the
industries they cover
• Formally cover over 1,000 companies,
representing the Russell 1000 Index and
~70% of the MSCI ACWI Index by market cap
• Hosted 1,589 meetings with company
management teams at our offices in 2017
_______________________As of September 30, 2018. 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 the firm.
For Professional Client Use Only 41
TYPICAL PORTFOLIO CONSTRUCTION
• Portfolio Holdings: 7-8 Themes; 20-30 Stocks
• Adequate Liquidity & High Conviction: 3.0- 4.0% at cost
• Maximum Thematic Exposure: 20%
Transaction Discipline and Risk Management
We focus on a diversified equity allocation and will invest in fixed income securities to help meet a
client’s risk tolerance and income needs
_______________________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.
• Strict valuation-driven process used to determine candidates:
– Short term (12-18 months) and long-term (3-5 years) values
determined
– Establish downside and upside targets
BUY/WATCH LIST
• Seek 50–100% appreciation potential within 3 years
• Entry point is a critical determinant of downside risk
• Attractive companies that fail to qualify due to valuation are returned
to the ‘watch list
BUY DISCIPLINE
• Price targets achieved:
– Reduce - short term
– Exit - long term
• Early recognition of a shift in investment thesis fundamentals
– Failure to meet milestones
– Shift in fundamentals that undermine the investment thesis
• Alternative candidate offers superior investment profile
TYPICAL SELL DISCIPLINE
For Professional Client Use Only 42
TEAM BIOS
Sherrell J. Aston, Jr.
Managing Director, Portfolio Manager
2002–Present Neuberger Berman
1997–2002 Security Analyst, Neuberger Berman, LLC
1996–1997 Security Analyst, Hull Capital, LLC
Columbia University, MBA
University of Virginia, BA
20 Years Industry Experience
Jason H. Vintiadis
Senior Vice President, Portfolio Manager
2013–Present Neuberger Berman
2007-2013 Tontine Associates, LLC.
2006-2007 Kenmar Global, LLC.
2000-2004 Envestnet Asset Management
MIT Sloan School of Management, MBA
Middlebury College, BA
14 Years Industry Experience
Daniel P. Paduano, CFA
Managing Director, Senior Portfolio Manager
1976–Present Neuberger Berman
1973–1976 Senior Security Analyst, Arnhold and
S. Bleichroeder, Inc.
1968–1973 Security Analyst, Dean Witter & Co.
New York University, MBA
Georgetown University, BA
48 Years Industry Experience
Biographies
Maximiliano Rohm
Senior Vice President, Portfolio Manager
2017-Present Neuberger Berman
2010–2017 Head Corp. Dev. LATAM Neuberger Berman
2006-2010 Corporate Strategy, Neuberger Berman
2002-2004 Transnational Foods Investment Fund
2000-2002 Investment Banking, Credit Suisse
MIT Sloan School of Management, MBA
Universidad Torcuato Di Tella, BA
15 Years Industry Experience
For Professional Client Use Only 44
Noureen McPartland
Portfolio Associate
1996 – Present Neuberger Berman
1995 – 1996 Metropolis Productions Inc.
Manhattan College, BA
20 Years Industry Experience
Jennifer Jung
Portfolio Associate
2005 – Present Neuberger Berman
2003 - 2005 RBC Wealth Management
1999 - 2003 Tucker Anthony Sutro (**acquired by RBC)
1998 – 1999 Prudential Securities
Baruch College, BA
18 Years Industry Experience
Deborah DeLuca
Senior Trading Associate
1995 – Present Neuberger Berman
1994 – 1995 Alex Brown
1987-1994 Prudential Securities
1985 – 1986 Guy Carpenter
Wagner College
31 Years Industry Experience
Biographies
Carolina M. Lopez
Portfolio Associate
2007-Present Neuberger Berman
2003-2007 BMO Capital Markets
2000-2003 The Peak Organization
Baruch College, BBA
13 Years Industry Experience
For Professional Client Use Only 45
DISCLAIMERS AND DISCLOURES
Paduano Group - Thematic Global All Cap Composite
Annualized Rates of Return – As of September 30, 2018
Past performance is no guarantee of future results.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 Only
Annualized Rates of Return¹ (%, for periods ended September 30, 2018)
3Q 2018 YTD 1 Year 3 Years 5 Years 10 Years
Since Inception
(1/1/1991)
Total Portfolio Return (Gross of Fee) 3.32 1.53 3.40 14.53 10.93 10.34 10.65
Total Portfolio Return (Net of Fee) 3.03 0.69 2.26 13.23 9.67 9.07 9.43
Equity Only Return (Gross of Fee) 3.49 1.51 3.54 16.16 11.96 10.31 12.20
MSCI World (Net) Index 4.98 5.43 11.24 13.54 9.28 8.56 7.66
S&P 500 Index 7.71 10.56 17.91 17.31 13.95 11.97 10.43
47
Paduano Group - Thematic Global All Cap Composite
Calendar Year Rates of Return
Past performance is no guarantee of future results.Please see attached important disclosures which contain complete performance information and definitions.
Annual Rates of Return (%, for periods ended December 31)
Total Portfolio Return
(Gross of Fee)
Total Portfolio Return
(Net of Fee)
Equity Only Return
(Gross of Fee) MSCI World (Net) Index S&P 500 Index
2017 25.60 24.20 28.33 22.40 21.83
2016 14.92 13.56 17.13 7.51 11.96
2015 -4.78 -5.89 -5.16 -0.87 1.38
2014 10.38 9.12 10.75 4.94 13.69
2013 27.46 26.03 29.81 26.68 32.39
2012 14.51 13.23 16.44 15.83 16.00
2011 -5.00 -6.12 -5.73 -5.54 2.11
2010 12.17 10.88 13.18 11.76 15.06
2009 44.52 42.81 49.26 29.99 26.46
2008 -37.44 -38.21 -46.01 -40.71 -37.00
2007 12.81 11.44 13.63 9.04 5.49
2006 15.85 14.49 16.85 20.07 15.79
2005 7.10 5.97 7.65 9.49 4.91
2004 16.72 15.48 17.94 14.72 10.88
2003 28.78 27.45 33.65 33.11 28.68
2002 -17.21 -18.18 -20.33 -19.89 -22.10
For Professional Client Use Only 48
Paduano Group - Thematic Global All Cap Composite
Calendar Year Rates of Return – Continued
Past performance is no guarantee of future results.Please see attached important disclosures which contain complete performance information and definitions.
Annual Rates of Return (%, for periods ended December 31)
Total Portfolio Return
(Gross of Fee)
Total Portfolio Return
(Net of Fee)
Equity Only Return
(Gross of Fee) MSCI World (Net) Index S&P 500 Index
2001 0.72 -0.32 1.22 -16.82 -11.88
2000 4.05 3.04 4.74 -13.18 -9.11
1999 31.13 29.80 41.06 24.93 21.04
1998 8.14 7.02 11.76 24.34 28.58
1997 22.27 21.04 26.04 15.76 33.36
1996 24.94 23.62 28.71 13.48 22.96
1995 29.52 28.16 35.11 20.72 37.58
1994 -3.30 -4.33 -5.27 5.08 1.32
1993 10.42 9.27 14.88 22.50 10.08
1992 13.35 12.16 19.96 -5.23 7.62
1991 23.42 22.15 36.32 18.28 30.47
For Professional Client Use Only 49
Paduano Group - Thematic Global All Cap Composite (Inception 1/1/1991)
Investment Performance Results – As of September 30, 2018
Past performance is no guarantee of future results.Please see attached important disclosures which contain complete performance information and definitions.
For Professional Client Use Only
Composite Benchmark Composite 3 Year Standard Deviation
Total Return
(%, Gross
of Fees)
Total Return
(%, Net
of Fees)
Equity Only
Return
(%, Gross
of Fees)
MSCI World
(Net) Index
(%)
S&P 500 Index
(%)
No. of
Accounts
Market Value
($, m)
Total Firm
Assets
($, bn)
% of Firm
Assets
Internal
Dispersion
Composite
(%)
MSCI World
(Net) Index
(%)
S&P 500 Index
(%)
YTD
Sep-
2018
1.53 0.69 1.51 5.43 10.56 286 583.4 -- -- -- 10.06 9.03 9.05
2017 25.60 24.20 28.33 22.40 21.83 270 562.2 295.2 0.19 2.99 11.52 10.23 9.92
2016 14.92 13.56 17.13 7.51 11.96 235 410.6 255.2 0.16 4.90 11.96 10.92 10.59
2015 -4.78 -5.89 -5.16 -0.87 1.38 221 351.8 240.4 0.15 1.26 11.01 10.80 10.47
2014 10.38 9.12 10.75 4.94 13.69 193 345.8 250.0 0.14 2.41 9.83 10.23 8.97
2013 27.46 26.03 29.81 26.68 32.39 151 229.5 241.7 0.09 2.41 13.76 13.54 11.94
2012 14.51 13.23 16.44 15.83 16.00 83 84.5 205.0 0.04 3.00 16.13 16.74 15.09
2011 -5.00 -6.12 -5.73 -5.54 2.11 102 93.7 193.1 0.05 1.87 19.16 20.15 18.71
2010 12.17 10.88 13.18 11.76 15.06 95 92.8 102.3 0.09 2.95 -- -- --
2009 44.52 42.81 49.26 29.99 26.46 74 61.5 91.4 0.07 9.70 -- -- --
2008 -37.44 -38.21 -46.01 -40.71 -37.00 105 85.7 79.2 0.11 13.53 -- -- --
50
Paduano Group - Thematic Global All Cap Composite
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 firmswere independently verified for the periods January 1, 1997 to December 31, 2010 and January 1, 1996 to December 31, 2010, respectively. Verification assesses whether (1) the firm has complied with all the composite construction requirements of theGIPS® 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. <COMPLIANCE_VERIFICATION_STATEMENT>Verification does not ensure theaccuracy of any specific composite presentation. 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, Neuberger Berman Australia Pty. Ltd., Neuberger Berman Trust Company N.A., Neuberger Berman Trust Company of DelawareN.A. and NB Alternatives Advisers LLC.
Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Paduano Thematic Global All Cap Composite (the "Composite") includes all fee-paying Paduano Thematic Global All Cap Composite portfolios with a minimum of $250,000 managed on a fully discretionary basis by the Paduano Group. The Paduano
Thematic Global All Cap strategy is intended for investors who seek capital appreciation a mix of global equity securities of varying market capitalization ranges, but do not have any allocations to fixed income or convertible securities. The strategy follows a thematic investing approach that identifies long-term macroeconomic trends and seeks specific investment exposure to these trends. The Composite creation date is September 2015 and the performance inception date is December 1990. 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 MSCI World (Net) Index (the "Index"). The index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of the
following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Net total return indexes reinvest dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Net total return indexes reinvest dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.
• Effective January 2018, the primary benchmark was changed from the S&P 500 Index to the MSCI World (Net) Index to better reflect the holdings held in the composite.Secondary Benchmark Description• The benchmark is the S&P 500 Index (the "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 Index 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. Composite Equity Only Return
(Gross of Fees) does not reflect the deduction of fees or trading expenses and excludes any cash or fixed income securities that may also be held in the Composite. Composite Equity Only Return (Gross of Fees) is presented as supplemental information and is not a required part of this presentation.
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 Only 51
Thematic Global All Cap Composite - Risk Metrics, EOG
_______________________Sources: Neuberger Berman; Factset. EOG = Equity Only (gross of fees). Data as of September 30, 2018. Past performance is no guarantee of future results. Please refer to the attached GIPS® compliant composite presentations for complete performance information. Equity only (EO) performance excludes the performance of the cash and or fixed income instruments that may also be held in the portfolio. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Portfolio information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
As of September 30, 2018
For Professional Client Use Only
3-YearStandard
DeviationBeta
Sharpe
RatioAlpha
Information
Ratio
Tracking
Error
Upside
Capture (%)
Downside
Capture (%)
Paduano Thematic Global All Cap EOG 11.24 -- 1.37 -- -- -- -- --
MSCI World Index - Net Return 9.03 1.03 1.41 2.23 0.41 6.41 120.62 108.24
S&P 500 - Total Return 9.05 0.98 1.82 -0.40 -0.16 6.99 96.51 108.00
5-YearStandard
DeviationBeta
Sharpe
RatioAlpha
Information
Ratio
Tracking
Error
Upside
Capture (%)
Downside
Capture (%)
Paduano Thematic Global All Cap EOG 11.33 -- 1.01 -- -- -- -- --
MSCI World Index - Net Return 9.54 1.03 0.92 2.40 0.47 5.71 125.38 103.27
S&P 500 - Total Return 9.47 1.02 1.42 -1.84 -0.33 5.94 95.20 112.39
Since InceptionStandard
DeviationBeta
Sharpe
RatioAlpha
Information
Ratio
Tracking
Error
Upside
Capture (%)
Downside
Capture (%)
Paduano Thematic Global All Cap EOG 16.34 -- 0.58 -- -- -- -- --
MSCI World Index - Net Return 14.19 1.02 0.35 4.49 0.59 7.63 235.92 99.55
S&P 500 - Total Return 13.93 1.06 0.56 1.48 0.25 6.96 201.41 100.44
52
Thematic Global All Cap Composite - Risk Metrics, TPG
_______________________Sources: Neuberger Berman; Factset. TPG = Total Portfolio (gross of fees). Data as of September 30, 2018. Past performance is no guarantee of future results. Please refer to the attached GIPS® compliant composite presentations for complete performance information. Gross of Fee performance is net of commissions and before the deduction of advisory fees. For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process. Portfolio information (characteristics, holdings, weightings, etc.) is subject to change without notice. Indexes are unmanaged and are not available for direct investment. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal.
As of September 30, 2018
3-YearStandard
DeviationBeta
Sharpe
RatioAlpha
Information
Ratio
Tracking
Error
Upside
Capture (%)
Downside
Capture (%)
Paduano Thematic Global All Cap TPG 10.06 -- 1.36 -- -- -- -- --
MSCI World Index - Net Return 9.03 0.92 1.41 1.95 0.17 5.73 105.19 98.16
S&P 500 - Total Return 9.05 0.88 1.82 -0.42 -0.44 6.30 84.48 97.95
5-YearStandard
DeviationBeta
Sharpe
RatioAlpha
Information
Ratio
Tracking
Error
Upside
Capture (%)
Downside
Capture (%)
Paduano Thematic Global All Cap TPG 10.34 -- 1.01 -- -- -- -- --
MSCI World Index - Net Return 9.54 0.94 0.92 2.13 0.32 5.18 109.61 96.48
S&P 500 - Total Return 9.47 0.94 1.42 -1.76 -0.56 5.38 83.58 105.10
Since InceptionStandard
DeviationBeta
Sharpe
RatioAlpha
Information
Ratio
Tracking
Error
Upside
Capture (%)
Downside
Capture (%)
Paduano Thematic Global All Cap TPG 13.73 -- 0.58 -- -- -- -- --
MSCI World Index - Net Return 14.19 0.85 0.35 3.58 0.44 6.72 88.49 98.08
S&P 500 - Total Return 13.93 0.89 0.56 1.10 0.04 6.11 69.67 99.00
53
Additional Disclosures
Institutional-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 September 30, 2018, the percentage of total institutional-oriented equity AUM outperforming the benchmark was as follows: Since Inception: 87%; 10-year: 74%; 5-year:
72%; and 3-year: 77%; and total institutional-oriented fixed income AUM outperforming was as follows: Since Inception: 95%, 10-year: 69%; 5-year: 73%; and 3-year: 61%. If HNW AUM were included, total
equity AUM outperforming the benchmark was as follows: Since Inception: 86%; 10-year: 49%; 5-year: 50%; and 3-year: 55%; and total fixed income AUM outperforming was as follows: Since Inception:
94%; 10-year: 69%; 5-year: 73%; and 3-year: 62%. 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 9/30/2018, six equity teams/strategies accounted for approximately 54% of the total firm equity (ISA, MAG and mutual fund combined) assets reflected, and nine
strategies accounted for approximately 53% of the total firm fixed income (ISA, MAG and mutual fund combined) assets 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 – 2016, 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 2016 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 2016. 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 March 31, 2018, 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 March 31, 2018, 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.
54
Index and Definitions
Performance Attribution shows the security and sector selection that contributed to the portfolio’s performance. It quantifies the impact of individual investment decisions and monitors
performance relative to a specific benchmark over a given period of time. It answers the questions of “How much of the return was achieved by over and under weighting sectors?” and
“How much did security selection within a sector contribute to relative performance?”
The Global Industry Classification Standard is used to derive the component economic sectors of the benchmark and the composite. The Global Industry Classification Standard
(“GICS”)SM was developed by and is the exclusive property of MSCI and Standard & Poor’s. “Global Industry Classification Standard (GICS),” “GICS” and “GICS Direct” are service marks
of MSCI and Standard & Poor’s.
Allocation effect is the portion of portfolio excess return attributed to taking different group bets from the benchmark. (If either the portfolio or the benchmark has no position in a given
group, allocation effect is the only effect.) A group’s allocation effect equals the weight of the portfolio’s group minus the weight of the benchmark’s group times the total return of the
benchmark group minus the total return of the benchmark in aggregate.
Selection effect is the portion of portfolio excess return attributable to choosing different securities within groups from the benchmark. A group’s selection effect equals the weight of the
benchmark’s group multiplied by the total return of the portfolio’s group minus the total return of the benchmark’s group.
Interaction effect is the portion of the portfolio's excess return attributable to combining allocation decisions with relative performance. This effect measures the strength of the manager’s
convictions. The interaction effect is the weight differential times the return differential. A group’s interaction effect equals the weight of the portfolio’s group minus the weight of the
benchmark’s group times the total return of the portfolio’s group minus the total return of the benchmark’s group.
Total Effect is the sum of the Sector Allocation, Stock Selection, and Interaction Effects. This effect measures the opportunity cost of the manager's investment decisions in a portfolio
group relative to the overall benchmark.
Attribution figures are based on information provided by FactSet. Although we consider this source to be reliable, Neuberger Berman does not offer an opinion as to the accuracy of
these numbers. FactSet calculates attribution on a buy-and-hold basis using daily portfolios. Since daily transactions are not taken into consideration, total returns of the portfolio will be
slightly off from the actual total returns.
Standard Deviation is a statistical measure of portfolio risk. Standard Deviation is equal to the square root of the Variance. It reflects the average deviation of the observations from their
sample mean. In the case of portfolio performance, the Standard Deviation describes the average deviation of the portfolio returns from the mean portfolio return over a certain period of
time. Standard Deviation measures how wide this range of returns typically is. The wider the typical range of returns, the higher the Standard Deviation of returns, and the higher the
portfolio risk.
Sharpe Ratio A measure of the risk-adjusted return of a portfolio. The ratio represents the return gained per unit of risk taken. The Sharpe ratio can be used to compare the performance of
managers. Managers with the same excess return for a period but different levels of risk will have Sharpe ratios that reflect the difference in the level of risk. The performance of the
manager with the lower Sharpe ratio would be interpreted as exhibiting comparatively more risk for the desired return compared to the other manager. If the two managers had the same
level of risk but different levels of excess return, the manager with the higher Sharpe ratio would be preferable because the manager achieved a higher return with the same level of risk as
the other manager. The Sharpe ratio is most helpful when comparing managers with both different returns and different levels of risk. In this case, the Sharpe ratio provides a per-unit
measure of the two managers that enables a comparison. The ratio is equal to the excess return divided by the Standard Deviation of the portfolio.
Beta is a measure of the systematic risk of a security or portfolio. Beta measures the historical sensitivity of portfolio or security excess returns to movement in the excess return of the
market index. The value for Beta is expressed as a percentage of the market where the market Beta is 1.0. A security or portfolio with a Beta above the market has volatility greater than
the market. If the Beta of a security was 1.3, a 1% increase in the market return resulted, on average, in a 1.3% increase in the security’s return. A security or portfolio with Beta below the
market has lower volatility than the market and the return on the security will move less than the market return. If the Beta of the security was 0.9, a 1% decrease in the market resulted in
only a 0.9% decrease in the security’s return.
For Professional Client Use Only 55
Index and Definitions
Alpha represents the historical return from an asset, based on factors unrelated to the underlying factors affecting the market. As such, Alpha is a measure of the return for asset specific
(or residual) risk. Alpha is used as measure of a manager’s contribution to performance due to security or sector selection. A positive (negative) Alpha indicates that a portfolio was
positively (negatively) rewarded for the residual risk taken for a given level of market exposure. If the market excess return is 2% and the portfolio Beta is 1.1, then the manager would have
to have an excess return greater than 2.2% for the manager to have contributed to the performance above and beyond the performance of the market.
Tracking Error is simply the standard deviation of a portfolio's relative returns (relative to some benchmark). Whereas the standard risk measure of standard deviation measures the
absolute return volatility, tracking error measures the volatility of the return differences between the portfolio and the benchmark over time. A portfolio that is actively managed in an
aggressive manner would have a large amount of tracking error versus its index, whereas a portfolio that is more constrained to look like its index (an index fund being the extreme) would
have smaller amounts of tracking error.
Downside Market Capture is a measure of the manager’s performance in down markets relative to the market itself. A value of 90 suggests the manager’s loss is only nine tenths of the
market’s loss. During the selected time period (for example: 3 years), the return for the market for each period is considered a down market period if it is less than zero. The returns for the
manager and the market for all down periods are calculated. The Downside Market Capture Ratio is calculated by dividing the return of the manager during the down periods by the return
of the market during the same periods.
Upside Market Capture is a measure of the manager’s performance in up markets relative to the market itself. A value of 110 suggests the manager performs ten percent better than the
market when the market is up. During the selected time period (for example: 3 years), the return for the market for each period is considered an up market period if it is greater than zero.
The returns for the manager and the market for all up periods are calculated. The Upside Market Capture Ratio is calculated by dividing the return of the manager during the up market
periods by the return of the market during the same periods.
Information Ratio is a ratio of portfolio returns above the returns of a benchmark -- usually an index -- to the volatility of those returns. The information ratio (IR) measures a portfolio
manager's ability to generate excess returns relative to a benchmark but also attempts to identify the consistency of the investor.
The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of November 27,
2013, the MSCI World Index consists of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland,
Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.
The 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 weighs 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. Indices are unmanaged, and, unless otherwise stated, the performance for the index shown includes reinvestment of all dividends and
capital gains distributions and does not reflect any fees or expenses. Investors cannot invest directly in an index.
.
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Representative Portfolio Disclaimer
Representative portfolio information (characteristics, holdings, weightings, etc.) is based upon the representative/model account. Representative accounts are selected based on such
factors as size, length of time under management and amount of restrictions. Any segment level performance shown (equity only or fixed income only) is presented gross of fees and
focuses exclusively on the investments in that particular segment of the portfolio being measured (equity or fixed income holdings) and excludes cash. Fund performance may vary
significantly from composite performance and representative portfolio information. Specific securities identified and described do not represent all of the securities purchased, sold or
recommended for advisory clients. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable.
For Professional Client Use Only 57
DisclaimerPublications referenced herein are intended solely for your information and should not be construed as an endorsement by Neuberger Berman. Neuberger Berman is not responsible for
the content of these publications. No further distribution of this presentation is permitted without the prior written consent of Neuberger Berman.
This 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, CH-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. 261533
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