neuberger berman china equity opportunities fund berman...launched the greater china equity strategy...
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Neuberger Berman China Equity Opportunities FundSeptember 2018
For Professional Client Use Only
For Professional Client Use OnlyFor Professional Client Use Only
I. Firm Overview
II. Neuberger Berman China Equity Opportunities Fund
III. Investment Team
IV. Appendices
I. Team Biographies
Table of Contents
1
FIRM OVERVIEW
Employee-Owned Investment Manager
Partnering with clients to achieve their unique objectives
Long-term Outperformance2Alignment of Interests
Portfolio managers invest alongside clients
Breadth of Independent Perspectives
601 investment professionals1 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
90%Institutional-oriented equity
Percentage of institutional-oriented AUM outperforming
benchmark since inception ended June 30, 2018
95%Institutional-oriented fixed income
Percentage of institutional-oriented AUM outperforming
benchmark since inception ended June 30, 2018
74%
Private equity
Percentage of NB Private Equity funds raised between
2005 – 2015 (since inception performance)
outperforming benchmark Net IRR
Deep Resources
Extensive fundamental research, access to management,
innovative ESG research, and sophisticated risk management
1. As of August 31, 2018.2. 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 75% for equities and 84% 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, public and private indices data is as of December 31, 2017. 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.
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 June 30, 2018. Firm assets under management (AUM) includes $103.3 billion in Equity assets, $132.2 billion in Fixed Income assets and $68.9 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).2. As of August 31, 2018.
EQUITY FIXED INCOME ALTERNATIVES
AUM $304bn1
Investment
Professionals2
$103bn
228
$132bn
176
Risk Parity
Global Tactical Asset Allocation
Global Relative & Absolute Return
Income Focused
Inflation Management
Liability Aware
$77bn 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
NEUBERGER BERMAN CHINA EQUITY OPPORTUNITIES FUND
For Professional Client Use Only
Investment Philosophy
“Investing in Change”
INVEST IN
CHANGE
• Look for companies in
industries with
changing dynamics
• Identify tomorrow’s
winners
INVEST WITH
CONVICTION
• Build a concentrated,
high conviction
portfolio
• Know what you own
• Benchmark agnostic
• High Active Share
LONG INVESTMENT
HORIZON
• Change doesn’t
happen overnight
• Holding Period: 2-5
years
Bin Yu, Managing Director, joined the firm in 2017. Bin is a Senior Portfolio Manager and Head of the China Equity
Team. Prior to joining the firm, he was the CIO and founding partner at Cloud Ridge Capital Management, where he
launched the Greater China Equity strategy in 2014. Prior to Cloud Ridge, he was a portfolio manager and managing
director in Public Equities at China Investment Corporation (CIC). Prior to CIC, he was a managing director with
Eagle Capital Management LLC based in New York. Bin began his career at McKinsey & Co in Stamford CT in 2001.
He earned MPhil, from Columbia University, where he was a PhD candidate in the business school. Bin also holds a
PhD in physics from Brandies University and attended Peking University.
7
For Professional Client Use Only
Changing China
Nowhere in the world is undergoing such transformational change as China today
China is experiencing significant growth and evolution. By looking for those areas of the market that will
develop in the next 5 years, investors can identify tomorrow’s winners today.
8
For Professional Client Use Only
Identifying Change
IMPROVING QUALITY OF LIFE
Secular Changes Influencing China Today
UPGRADE OF HUMAN CAPITAL STATE-OWNED ENTERPRISES
260Billion
USD spent by Chinese
consumers outside China in
2016
8KChina’s per capital GDP is
on par with mid-level EM
markets such as Malaysia
40% China’s 18-year-olds went to
college in 2016
An Increasingly Educated Economy
• Improving quality of life
Environmental management
Consumer brands
Services: travel, entertainment, financial
services, healthcare
• Upgrade of human capital
Education
R&D driven companies (R&D workforce is set to
double by 2025 and triple by 2035)
• State Owned Enterprises
Mixed ownership
Employee incentives
Enhanced capital allocation
Consolidation
Opportunities:
8% ROE barely above cost of
capital
60%Of total assets (industrial
companies only)
40%Of industrial profits, less
than ½ of efficiency of
private firms
100
200
300
400
500
600
700
800
900
2000
2002
2004
2006
2008
2010
2012
2014
2016
Education
Population
Expressway
Mileage
GDP
_______________________Source: Neuberger Berman & WIND, as of March 31, 2018.
9
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Investment Portfolio
INVEST ACROSS SECULAR TRENDS
“Capitalizing on Change”
30.9%
18.7%
10.9%
10.9%
7.5%
7.5%
5.7%
3.2%
0.0%
0.0%
0.0%
39.2%
21.3%
2.0%
9.6%
4.4%
2.7%
2.6%
3.6%
4.1%
5.4%
5.1%
Information Technology
Financials
Materials
Consumer Discretionary
Industrials
Utilities
Consumer Staples
Health Care
Telecommunication Services
Real Estate
Energy
Fund Benchmark
Security Name Fund SectorQuality of
Life
Upgrade of
Human
Capital
State-owned
Enterprises
1. Wuliangye Yibin 5.7%Consumer
Staples
2. China Taiping
Insurance5.6% Financials
3. China Pacific Insurance 5.3% Financials
4. BTG Hotels 5.2%Consumer
Discretionary
5. Alibaba Group 5.0% IT
6. Tencent Holdings 4.9% IT
7. Noah Holdings 4.4% Financials
8. ASM Pacific
Technology4.2% IT
9. Tangshan Jidong
Cement3.8% Materials
10. Huifu Payment Limited 3.4% IT
Total Top 10% 47.5%
Total No. of Stocks 28
_______________________Source: Neuberger Berman, as of June 30, 2018.
DIVERSIFIED SECTOR ALLOCATION
Top 10 Holdings Sector Allocation (%)
10
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Investment Portfolio
Where do we look for investments?
China A19%
HK55%
US21%
Cash5%
A DIVERSE MARKET
THE ANATOMY OF THE CHINA EQUITIES MARKET CHINA EQUITY OPPORTUNITIES FUND
Portfolio Allocation as of June 30, 2018
• Bottom up search for best ideas across
markets
_______________________Source: Neuberger Berman & WIND, as of June 30, 2018.
100 1,600900
2,700100
2,900
3,500
7,600
0%
20%
40%
60%
80%
100%
Number of Stocks Total Market Cap ($ billion)
ADR H Shares A+H Dual Listing China A Shares
0%
20%
40%
60%
80%
100%
China A Hong Kong & ADR
Information Technology
Utilities
Health Care
Materials
Industrials
Real Estate
Consumer Staples
Telecommunication Services
Energy
Financials
Consumer Discretionary
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For Professional Client Use Only
Investment Discipline
• Occasionally, we find the ideal investment (often in a market rout, or an under-covered name) that meets all three criteria
• Most of the time, we find companies that, with the appropriate catalysts, could transform into higher performing companies over time
Existence of hidden value in unrecognized
assets
Mis-pricing opportunities
Potential to double over three to five years
Management quality
Corporate governance
Longer-term business strategy
Innovation
New products
Inflection points
Changing industry dynamics
Well Positioned
for Change
Well Managed
Reasonably
Priced
What do we look for in an investment?
12
For Professional Client Use Only
Investment Team
Local experts with a global perspective, brought together by a cohesive culture and client alignment
As of June 30, 2018. Staffing is subject to change without notice.
Bin Yu
Lead Portfolio Manager
Financials
17 Years of Industry Experience
PORTFOLIO MANAGER
Emily Zhang
Materials, Consumer
10 Yrs of Industry Exp.
SECTOR-FOCUSED RESEARCH ANALYSTS
ASIAN RESEARCH ANALYSTS
Claire Xiao
Industrials, Energy
6 Yrs of Industry Exp.
Mike Miao
Strategy and Policy Research
10 Yrs of Industry Exp.
GLOBAL EQUITY RESEARCH DEPARTMENT
Alan Tsang, CFA
Financials / Property
16 Yrs of Industry Exp.
Leo Lin, CFA
Industrials
6 Yrs of Industry Exp.
Yan Taw (YT) Boon
Technology, Media & Telecom
14 Yrs of Industry Exp.
Timothy Creedon
Director of Global Equity Research
41 Dedicated Research Professionals
• 34 Research Analysts with an average of 19 years of industry
experience
• Research analysts are supported by 7 research associates
Global Equity Research Department meetings in 2016
• Hosted 1,500+ meetings with company management
• Hosted 1,200+ meetings with sell-side analysts in NB offices
• Attended 1,000+ meetings with companies outside of NB offices
Shawn Li
Healtchare
7 Yrs of Industry Exp.
Fan Liu
Technology, Media & Telecom
7 Yrs of Industry Exp.
Baoying Zhai
Consumer Discretionary
5 Yrs of Industry Exp.
Nancy Wang
Operations Analyst
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Investment Process Overview
High conviction approach emphasizing fundamental research
HIGH
CONVICTION
PORTFOLIO
25 - 35
Core Holdings
Disciplined Buy /
Sell Process
_______________________* Refer Appendix for more detailed Universe information.This material is intended as a broad overview of the Portfolio Manager’s style, philosophy and process and is subject to change without notice. Portfolio Manager’s views may differ from those of other Portfolio Managers as well as the views of Neuberger Berman Group LLC.
RISK MANAGEMENT
Investment
Universe
~700 Companies
• Initial Screening on:
o Liquidity
o Market cap.
o Valuation
o Business
fundamentals
• Mega Cap (>$10B)
o ~150 companies with
~4T mkt cap.
• Small-Mid Cap ($1-$10B)
o ~500 companies with
~2T mkt cap.
• Global China Plays
o 500 companies with
significant China
exposure
Research List
~200 Companies
• Industry and company
research by sector
analysts to determine
key performance drivers
• Research list prioritized
by portfolio manager with
input from sector
analysts
• Favoured Themes
o 75-150 companies
• Adjacencies
o 25-75 companies
• Leaders in other
Industries
o 25-75 companies
Focus List
~80 Companies
• Deep dive analysis on
company / industry
• Detailed financial models
and valuation metrics
• Identify:
o Exciting opportunities
for change
o Attractive risk /
reward profiles
o Potential substitutes
for existing holdings
Portfolio
Construction
• Weekly research
meetings
• Bi-weekly internal model
portfolio review
• Monthly analyst updates
of key industry drivers
and trends
• Ongoing monitoring,
maintenance and
reviews
14
For Professional Client Use Only
Case Study – Tencent
New Opportunities in a Well Loved Stock
COMPANY DESCRIPTION
EXPOSURE TO THEMES
“CHANGE”
_______________________Source: Bloomberg. As of June 30, 2018.This document is intended as a broad overview of the Portfolio Manager’s style, philosophy and process and is subject to change without notice. References to any Funds or Securities in the document are for illustrative purposes only and do not constitute a recommendation to investors
Tencent is the biggest internet services
provider in China. It is the market leader in
games and social networking. It also
provides advertising, entertainment,
financial services, retail and other
consumer services either directly through a
network of Tencent partners.
INVESTMENT RATIONALE
Well Positioned for Change
• Tencent takes up over 20% of time-spent on Chinese internet with 1B combined Wechat/QQ users.
Well Managed
• Great track record in establishing and building out a strong suite of products internally and through partners.
Reasonably Priced
• Monetization of Tencent properties is low relative to competitors. Tencent could double its earnings from
advertising and financial services.
PRICE TREND
-100%
0%
100%
200%
300%
400%
500%
600%
700%
800%
900%
Jan-13 Jun-13 Nov-13 Apr-14 Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18
Tencent MSCI China Index Buy/Add Sell/Trim
15
For Professional Client Use Only
Case Study – NOAH
Market leader in a nascent industry
Noah is leading independent wealth and
asset management provider in China,
with a focus on high net worth
individuals and enterprises. Noah sold
$18B of financial products in 2017,
through its network of 1,300 relationship
managers in 79 cities.
COMPANY DESCRIPTION
EXPOSURE TO THEMES
“CHANGE”
INVESTMENT RATIONALE
Well Positioned for Change
• Accumulation of wealth and emergence of private banking to serve those needs
Well Managed
• Noah has been run by the same management team since day one, with a strong track record in maintaining
long-term growth and reputation of the firm at the expense of short-term growth, and successful expansion
into asset management and advisory.
Reasonably Priced
• Almost always lumped with much more equity market-sensitive brokers and only valued at 10-20x P/E.
PRICE TREND
_______________________Source: Bloomberg. As of June 30, 2018.This document is intended as a broad overview of the Portfolio Manager’s style, philosophy and process and is subject to change without notice. References to any Funds or Securities in the document are for illustrative purposes only and do not constitute a recommendation to investors
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18
NOAH MSCI China Index Buy/Add Sell/Trim
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Case Study – Kweichou Moutai
Quality through cyclical challenges
The company owns the iconic Maotai
brand (premium hard liquor).Based in
remote province of Kweichou, its liquor
brand is well-known nationally and
dominates the ultra-premium segment. KM
earned 25B on just 59B of sales in 2017.
COMPANY DESCRIPTION
EXPOSURE TO THEMES
“CHANGE”
INVESTMENT RATIONALE
Well Positioned for Change
• One of the few true Chinese luxury brands to meet needs of rising middle-class consumers.
Well Managed
• One of the best SOE stories, management established and cemented Maotai’s reputation as the preeminent
liquor brand.
Reasonably Priced
• Only 12X during crisis and currently 25x in the growth cycle
PRICE TREND
_______________________Source: Bloomberg. As of June 30, 2018.This document is intended as a broad overview of the Portfolio Manager’s style, philosophy and process and is subject to change without notice. References to any Funds or Securities in the document are for illustrative purposes only and do not constitute a recommendation to investors
-100%
0%
100%
200%
300%
400%
500%
Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18
Kweichou Moutai MSCI China Index Buy/Add Sell/Trim
17
For Professional Client Use Only
Case Study – BBMG
Structural Transformation of a Traditional Industry
BBMG is a building materials supplier and
property developer based in Beijing. It
controls over 50% of cement capacity in
Beijing, Tianjin and Hebei (BTH). It also
both develops and owns real estate with a
focus in the BTH.
COMPANY DESCRIPTION INVESTMENT RATIONALE
Well Positioned for Change
• Well positioned on multiple fronts, demand recovery in multi-year build-out of BTH region, supply
consolidation and pricing discipline in cement industry, and emission control.
Well Managed
• Option on SOE reform
Reasonably Priced
• Margin potential of cement and hidden value of industrial properties not reflected in stock price.
EXPOSURE TO THEMES
“CHANGE”
PRICE TREND
_______________________Source: Bloomberg. As of June 30, 2018.This document is intended as a broad overview of the Portfolio Manager’s style, philosophy and process and is subject to change without notice. References to any Funds or Securities in the document are for illustrative purposes only and do not constitute a recommendation to investors
-40%
-20%
0%
20%
40%
60%
80%
100%
Sep-14 Feb-15 Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18 Jun-18
BBMG MSCI China Index Buy/Add Sell/Trim
18
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Portfolio Construction
• Know What You Own
• Diversify Across Investment Themes
• Patient, Low Turnover Investor
A high conviction, benchmark agnostic portfolio
KEY PRINCIPLES PORTFOLIO GUIDELINES
TYPICAL
Geographic
Exposure
80-100% China-based (A share, H share,
p-notes, ADRs)
0-20% global companies
Portfolio
Composition25-35 stocks
Concentration
Single names: 3-10% (based on conviction
and liquidity)
Top 10 names: 50-70%
Turnover/
Investment Horizon
50-100% (in dollar terms)
Holding 24-60 months
Market
Capitalization
No bias between SMID and Large Caps
Limited exposure to true Small Caps (less than
$1 billion)
19
For Professional Client Use Only
-8.92
-2.66
-7.25
9.41
3.39
10.27
-5.22-3.50
-1.75
21.23
7.08
10.59
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Month QTD YTD 1 Year 3 Year Since Inception
Representative Account Net Performance MSCI China Index
Representative Account Net Performance
Returns (%) As of June 30, 2018
_______________________Source: Neuberger Berman1. Performance is based on Neuberger Berman China Equity US Feeder Fund, a Cayman Master/Feeder private fund incepted on 1st October, 2014 Performance is gross of fees and calculated based on Class F shares. Please
note that Class F shares have been re-designated as Class C shares on November 1, 2017. Neuberger Berman China Equity US Feeder Fund is managed by Neuberger Berman China Equity Team, and uses the same investment process and strategy as Neuberger Berman China Equity Opportunities Fund’s. There are differences in the portfolio construction and the performance of the Neuberger Berman China Equity US Feeder Fund and Neuberger Berman China Equity Opportunities Fund. Neuberger Berman China Equity Opportunities Fund is subject to more investment restrictions due to the UCITS regulations. Benchmark = MSCI China TR Index. Indices are shown for illustrative purposes only and are not available for direct investment. Indices are unmanaged, include reinvestment of any dividends, capital gain distributions or other earnings and do not reflect any fees or expenses. Investors cannot invest directly in an index. There are differences in the fee structure, investment policy, strategy and portfolio composition between the representative account and the UCITS fund. Actual results may vary due to specific client and fund guidelines and other factors. Please see additional disclosures.
Past performance is not indicative of future returns. Returns longer than 1 year are annualized
Annualized
20
For Professional Client Use Only
Why Neuberger Berman China Equity Opportunities Fund
A concentrated, high conviction, long-term value-oriented approach (25-35 stocks)
Deep bottom-up research
A liquid portfolio combined with comprehensive risk management
Summary
Experienced local team with global perspective, leveraging the breadth of Neuberger Berman resources
Invest in changes and capitalize on long-term, sustainable trends
21
For Professional Client Use Only
Neuberger Berman China Equity Opportunities Fund
Daily liquid UCITS Fund
Investment Manager Neuberger Berman Europe Limited
Vehicle / Structure
Irish-domiciled fund
Authorised by the Central Bank of Ireland
UCITS
Independent Board members
Daily Liquidity
Domicile Dublin
Inception Date December 15, 2017
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 ISIN: IE00BYWSP828
Administrator BBH
Benchmark MSCI CHINA (USD Total Return) Index
Base Currency US Dollars
_______________________Fees as of latest available Prospectus. Please check with your Neuberger Berman representative to see if these share classes are available at this time.
22
For Professional Client Use OnlyFor Professional Client Use Only
Sector Weightings
_______________________Source: Neuberger Berman, MSCI; Fact Set. Neuberger Berman LLC. Morningstar.
SECTOR BREAKDOWN (%)
As of August 31, 2018
27.1 22.0
10.6 9.8 9.06.4 6.2 4.9
0.0 0.0 0.04.0
22.0
37.5
4.62.0 2.4
8.9
2.7 3.5 5.6 4.9 5.7
0.00
5
10
15
20
25
30
35
40
Fund MSCI China Index
For Professional Client Use Only23
For Professional Client Use OnlyFor Professional Client Use Only
Top Ten Holdings
As of August 31, 2018
_______________________Source: Morningstar. Investors should note that the Fund does not track this index, which is included here for comparison purposes only. Benchmark: MSCI China Index (USD Net Total Return).
Fund Benchmark
China Taiping Insurance Holdings Co., Ltd. 6.09 0.32
Wuliangye Yibin Co., Ltd. Class A 5.74 0.02
China Pacific Insurance (Group) Co., Ltd. Class H 5.51 0.61
Noah Holdings Ltd. Sponsored ADR Class A 4.97 0.08
Sinopharm Group Co., Ltd. Class H 4.87 0.37
Huaneng Renewables Corp. Ltd. Class H 4.87 0.10
Tangshan Jidong Cement Co. Ltd. Class A 4.67 0.00
Momo Inc Sponsored ADR Class A 4.44 0.34
Industrial and Commercial Bank of China Limited Class H 4.24 3.19
New China Life Insurance Co., Ltd. Class H 3.95 0.23
TOP 10 HOLDINGS (%)
For Professional Client Use Only24
For Professional Client Use Only
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.
Emerging Markets Risk: Emerging markets are likely to bear higher risk due to a possible lack of adequate financial, legal, social, political and economic structures,
protection and stability as well as uncertain tax positions which may lead to lower liquidity. The NAV of the fund may experience medium to high volatility due to lower
liquidity and the availability of reliable information, as well as due to the fund's investment policies or portfolio management techniques.
Stock Connect Risk: The Shanghai/Shengzen-Hong Kong Stock Connect are relatively new trading programmes, where many of the relevant regulations are untested
and subject to change at any moment as well as not as active as exchanges in more developed markets which may affect the ability to sell your shares. Additional risks
needs to be considered and you should refer to the 'investment risk' section of the prospectus for details.
Single Country Risk: Where a fund invests primarily in a single country, it may be subject to greater risk and above average market volatility than an investment in a
broader range of securities covering multiple countries.
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 your investment 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.
Principal Investment Risks
25
TEAM BIOGRAPHIES
For Professional Client Use Only
Bin Yu – Lead Portfolio Manager
Deep knowledge and experience investing in Asia, with a global perspective
Education
2003–08
2008
2009–14 • Global Equities Portfolio Manager with China angle, for several multi-billion active mandates
– Long-short 2009-2013
– Long-only 2010-2013
– Equity special situation 2012-2013
• Portfolio Manager for both internal and external global equity mandates
• Built the equity platform, recruited and led a team of 12 research analysts
2001–03
Columbia Business School
Brandeis University
Peking University
• Set up global equity platform (Qualified Domestic Institutional Investor) for a top five Chinese mutual fund
• One of six members of investment team
• Led coverage of financial services; secondary coverage of industrial and technology
• Seek quality companies with underappreciated potential for change
• Concentrated, low turnover portfolio of high conviction ideas
• Consistently top-ranked U.S. equity manager
• Served broad-based clients in industries such as media, financial services, IT services and manufacturing
• M. Phil. In Operations Management and Ph.D. candidate
• Ph.D. in Physics
• Majored in Physics
2014–17 CloudRidge CapitalChief Investment Officer
• Founder and Portfolio Manager
• China-focused long only fund
• Recruited current investment team
China Investment
Corporation (CIC)Beijing, China
Managing Director,
Portfolio Manager
GF FundsHead of Global Equities
Eagle Capital ManagementManaging Director
McKinseyAssociate
27
For Professional Client Use Only
Full Team Biographies
• Portfolio Manager, formerly CIO and Founding Partner of Cloud Ridge from 2014-2017
• Most recently a managing director at China Investment Corporation (CIC). From 2009-2013, was Portfolio Manager or co-Portfolio
Manager on several sizable equity strategies (long, long-short and special situation). Additionally, responsible for managing research
analysts and allocating to outside global equity managers from 2011-2013
• Head of Global Equities at GF funds in 2008, developed initial infrastructure for Qualified Domestic Institutional Investor program
• Managing Director at New York-based Eagle Capital Management LLC from 2003-2008 as a member of the six person investment
team, responsible for primary coverage in financial services, and secondary coverage of manufacturing and technology stocks
• Associate at McKinsey & Co. in the Stamford Office from 2001-2003, where he worked on marketing, operations and strategy cases
in manufacturing, media, IT services and financial services
• Holds an M. Phil. In Operations Management from Columbia University, where he was a Ph.D. candidate in the Business School.
Also holds a Ph.D. in physics from Brandeis University and attended Peking University
• Senior Research Analyst, formerly COO and Founding Partner of Cloud Ridge
• From 2009-2012, COO and Director of Research at Global Finance Institute, a think tank affiliated with State Council’s Development
Research Center, where he was responsible for managing 20 analysts who researched extensively on macro economic and policy
issues for government agencies such as the China Development Bank and the Banking Association, and organizing high level forums
• Investment Director at Beijing AoHua Inc., the media and marketing arm for the Beijing Olympics Committee, where he was
responsible for relationship management with major sponsors and government agencies, and production of TV programs
• Project manager at China Northern Industry Company from 1996-2004, with extensive experiences in trade finance, government
relations and business development
• Holds an M.A. in finance and public policy from the School of International and Public Affairs at Columbia University and a B.S. in
International Trade from Changchun University of Technology
Mike Miao
Bin Yu
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For Professional Client Use Only
Full Team Biographies (Continued)
• Senior Research Analyst, formerly Founding Partner of Cloud Ridge
• Business Analyst at Strategy Department of Citic Securities from 2011-2014
• Prior to Citic Securities, she was an equity analyst for over four years, covering China equity on the buyside at Thornburg Investment
(U.S.), and the China metals and mining sector on the sell-side at JP Morgan, respectively
• Holds an MBA from Columbia University and a BE from Shanghai Jiaotong University
• Research Analyst
• Associate in strategy consulting in Accenture’s Beijing Office from 2012-2014, where she participated in marketing and strategy studies,
primarily for companies in the energy industry
• Holds an MA and BA in Applied Mathematics from Renmin University of China
• Operations Analyst
• Auditor in Technology Media Telecom at Deloitte Touche Tohmatsu in Beijing from 2015-2016
• Holds a Master’s degree in Accounting from University of Miami
• Research Analyst
• Research analyst at AB Bernstein, launched coverage of Asia-Pacific Healthcare
• Prior to AB Bernstein, worked at the Principal Investment area at Goldman Sachs, New York
• Holds MS from Carnegie Mellon University and BS from Zhejiang University with honor
Emily Zhang
Claire Xiao
Nancy Wang
Shawn Li
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APPENDICES
For Professional Client Use Only
The Greater China Equity Universe
(>$10B market cap)
Companies Key Players Our Investment Edge
• Financials
• State Owned Enterprise (SOE) champions
• Established sector leaders
• Index funds
• Large global long funds
• Deep understanding and experience researching and investing in large companies impacted by macro policy making and industry changes and trends
• Rigorous research of SMID Cap companies helps identify emerging trends and competitors that could impact Mega Cap companies; trends and companies that are not always apparent to large globally focused funds
• Single product growth stories
• Opportunities across all sectors
• EM specialists
• Local funds
• Retail investors
• Spot new themes and changes early with first-hand access to management teams and markets
• Extensive network in combination with a unique background and experience that can separate hype from sustainable businesses, and to validate management capabilities
• Apply discipline and analytical rigor to exciting new business models and companies
• Consumer
• Industrials
• Resources
• Large global long funds
• Ability to better assess the local reality and upside potential than global investors visiting China infrequently
• Utilize the firm’s robust Global Central Research Department for additional insights into each company’s business conducted outside of China
Opportunity set of approximately 700 companies
Opportunity Set
• ~150 mega cap companies
• ~$4T mkt cap
• ~500 SMID companies
• ~$2T mkt cap
• ~ 50 large global companies with significant China exposure
Mega Cap
($1-10B market cap)
SMID Cap
Global China
Plays
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For Professional Client Use Only
Fundamental Research Workflow
Seek companies that are positioned to benefit from long-term trends and meaningful changes
1) Identify Compelling
Trend or Change
2) Conduct Initial
Assessment / Review
3) Form In-depth Thesis /
Full Research Review
4) Continuously
Reassess Thesis
Idea Generation
• Industries experiencing secular
change (e.g., Jidong Cement)
• Industries with disruptor entering
market (e.g., Tencent)
• Companies at inflection points
(e.g., JD)
• Quality companies going through
short-term challenges
(e.g., Kweichou Moutai)
• Fast growing companies in nascent
industries (e.g., Noah)
Detailed Fundamental Analysis
• Identify key operational and financial
metrics
• Conduct management due diligence
and interviews
• In-depth review of competitors and
value chain
• Build detailed proprietary valuation
models
• Assess upside/downside based on
possible outcomes
Ongoing Monitoring
• Periodically update financial models
and valuation assumptions
• Ongoing harvest reviews
Catalysts realized?
Valuation/liquidity reasonable?
Thesis still valid?
Better investments available?
Price target?
Sell discipline?
Preliminary Company Review
• Review reported financial
information
• Review management track
record
• Conduct industry analysis and build
preliminary model to establish
assumptions (size, growth, margin
trends, etc.)
Is the company positioned to
take advantage of the identified
trend or change?
Does the company appear to
have substantial upside
potential?
Potential for 100% upside over
three to five years?
Has the thesis concluded or
changed? Is it ongoing?
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For Professional Client Use Only
Disclaimer (Continued)
Equity and Fixed Income AUM Outperformance Note: Firm equity and fixed income Assets Under Management (“AUM”) outperformance figures are based upon the aggregate assets for all Neuberger Berman LLC and Neuberger Berman Fixed Income LLC traditional equity and fixed income strategies that are included in each firm’s institutional separate account (“ISA”), managed account/wrap (“MAG”) and private asset management/high net worth (“PAM”) composites. The AUM outperformance results are based on the overall performance of each individual investment strategy against its respective strategy benchmark and results are asset weighted so strategies with the largest amount of assets under management have the largest impact on the results. As of 12/31/2011, seven equity teams/strategies accounted for approximately 53% of the total firm equity (PAM, ISA and MAG combined) assets reflected, and eight strategies accounted for approximately 71% of the total firm fixed income (PAM, ISA and MAG combined) assets reflected. The performance of the individual PAM equity teams/strategies is generally shown as a supplemental exhibit to the PAM Equity Composite. The respective ISA, MAG and PAM composite reports, as well as the PAM Management Team supplemental performance exhibits are available upon request. Individual strategies may have experienced negative performance during certain periods of time. Hedge fund, private equity and other private investment vehicle assets are not reflected in the AUM and product outperformance results shown. AUM outperformance for ISA and MAG strategies 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 and products outperformance results would be lower. Investing entails risk, including possible loss of principal. Past performance is no guarantee of future results.
Barron’s “Best Fund Families of 2011”: To qualify for the Lipper/Barron's Fund Survey, a group must have at least three funds in Lipper's general U.S.-stock category, as well as one in world equity, which combines global and international funds. They also require at least one mixed-equity fund, which holds stocks and bonds. Fund shops also must have at least two taxable-bond funds and one-tax-exempt offering. Each fund's returns are adjusted for 12b-1 fees, which are used for marketing and distribution expenses. The funds usually add these fees back into returns. Lipper/Barron’s aim is to measure the manager's skill. Fund loads, or sales charges, aren't included in the calculation of returns, either. Each fund's return is measured against those of all funds in its Lipper category, such as, say, small-cap value. That leads to a percentile ranking, with 100 the highest and 1 the lowest, which is then weighted by asset size, relative to the fund family's other assets in its general classification- world equity, for instance. If a family's biggest funds do well, that boosts its overall ranking. Poor performance in a big fund obviously has a big effect on the ranking. Finally, the score is multiplied by the weighting of its general classification, as determined by the entire Lipper universe of funds. The category weightings for the one year results: general equity, 38.04%; world equity, 12.77%; mixed equity, 17.36%; taxable bonds, 27.43% and tax-exempt bonds, 4.40%.
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For Professional Client Use Only
DisclaimerThis document is addressed to professional clients only.
This document is a financial promotion and is issued by Neuberger Berman Europe Limited, which is authorised and regulated by the Financial Conduct Authority and is registered in
England and Wales, at Lansdowne House, 57 Berkeley Square, London, W1J 6ER and is also a Registered Investment Adviser with the Securities and Exchange Commission in the U.S.
and regulated by the Dubai Financial Services Authority.
This fund is a sub-fund of Neuberger Berman Investment Funds PLC, authorised by the Central Bank of Ireland pursuant to the European Communities (Undertaking for Collective
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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.
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
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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.
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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
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© 2018 Neuberger Berman Group LLC. All rights reserved. Ref: 241404 207111
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