Lehman Brothers acquisition and bankruptcy

In July 2003, the company announced that it was in merger discussions with Lehman Brothers. These discussions ultimately resulted in the firm's acquisition by Lehman on October 31, 2003, for approximately $2.63 billion in cash and securities, or approximately 26 times earnings.^[10] That transaction closed in October 2003 and from that time, until 2008, Neuberger Berman served as one of the asset management arms of Lehman Brothers’ Investment Management Division. In that same year, Lehman acquired fixed income manager Lincoln Capital Fixed Income Management and private equity manager Crossroads Group.^[4]

Management buyout

On September 15, 2008, virtually unprecedented volatility in global securities markets resulted in Lehman Brothers’ collapse and bankruptcy filing. Neuberger Berman continued to operate, notwithstanding Lehman's bankruptcy and sought opportunities to spin itself off from its parent. On September 29, 2008, Lehman agreed to sell its asset management businesses, including Neuberger Berman, to a pair of private-equity firms, Bain Capital Partners and Hellman & Friedman. The transaction was expected to close in early 2009;^[11] however, a competing bid was entered by the firm's management, who ultimately prevailed in a bankruptcy auction held on December 3, topping the deal with Bain and Hellman.^[12] The firm spun itself off in May 2009, in a transaction recognized by Fund Industry Intelligence as Deal of the Year.^[13] Lehman Brothers' creditors initially retained a 49% common equity interest in the firm and an $875 million preferred equity stake,^[12] with a coupon that climbed to 12% over three years. The preferred equity position was fully repaid in 2012.^[14][15] The new entity, including Neuberger, Lincoln Capital, and Crossroads, was named Neuberger Berman Group LLC.^[16] Under employee control, Larry Zicklin rejoined the firm as a member of the Board of Directors. Lehman Brothers creditors have received over $1.5 billion from the employees of Neuberger Berman, dwarfing the proceeds paid by Barclays and Nomura for businesses representing 90% of Lehman Brothers employees.^[4]

Independence and expansion

Since its reemergence as an independent firm, Neuberger Berman has enjoyed a period of sustained growth. The firm increased its assets under management 14% per year from 2010 to 2014,^[5] reaching $250 billion,^[17] which placed the firm at the top of its peer group by asset growth.^[5] The firm currently employs approximately 2,000 people,^[17] and has expanded beyond its traditional equity focus into the growing areas of emerging markets debt,^[18] high-yield bonds,^[19] liquid alternatives and private equity,^[20][4] among other strategies. During this period the firm expanded its global presence, adding coverage offices in key Asia-Pacific markets and elsewhere to be closer to a growing overseas client base.^[21]

The end of 2014 marked Neuberger Berman's return to full employee ownership, highlighting the firm's independence and clearing the path for future growth.^[5][22] Employee ownership has been recognized by industry leaders as a key factor in the success of asset management firms, and Neuberger Berman's position as an employee-owned firm is cited as a reason for its high talent retention rate.^[23] In recognition of its culture, Neuberger Berman won the top rank in its category on Pensions & Investments' 2016 Best Places to Work in Money Management survey,^[24] and had been named to the Best Places list in 2013, 2014, and 2015.^[25][26][27]

In September 2017, Neuberger Berman bought Toronto's Breton Hill Capital for US$2 billion in assets under management.^[28][29]