Erik Knutzen, the new multiasset-class chief investment officer at Neuberger Berman Group LLC, is looking to expand the reach of the New York-based money manager’s multiasset capabilities.
Neuberger Berman has been providing multiasset-class solutions to a few of its clients for years, most notably, to the $124 billion Teacher Retirement System of Texas, Austin, and China's $180 billion National Council for Social Security Fund. But now, the New York-based firm is looking to develop these offerings with the help of investment consultant NEPC LLC’s former investment chief for more of its clients.
“We’re looking to take these capabilities that we’re delivering to a relatively small number of clients and deliver them to a broader set of clients," said Mr. Knutzen in an interview.
Mr. Knutzen, who joined Neuberger Berman on May 4, said his job is not to pick stocks and bonds, but rather to find ways to add value and seek potential opportunities.
“Job one is to work closely with our large multiasset-class clients,” he said about the position. “The second aspect of the role is to enhance our asset allocation capabilities across the firm.”
Mr. Knutzen said that he and the 11-person team he oversees are looking to enhance Neuberger Berman’s multiasset-class models by adding strategic and tactical asset allocation services and making them available in to a wider array of institutional investors — including smaller defined benefit plans.
Joseph Amato, president and CIO of Neuberger Berman, said in an e-mailed response to questions that the firm hired Mr. Knutzen because it was “the right time to have a dedicated professional focusing on” the relationships with its institutional clients engaged in multiasset strategies “as well as driving the asset allocation process on a firmwide level.”
“As institutional investors are focused more on outcomes as opposed to style boxes and managers to fit them, we see a tremendous opportunity to grow our multiasset-class group to meet this client need,” Mr. Amato added. “Our firm is well positioned to be a strong player as multiasset-class solutions become more prevalent.”
Neuberger Berman had $247 billion in total assets under management at March 31; the firm doesn’t break out its multiasset class assets.
By hiring Mr. Knutzen to oversee its multiasset class capabilities, Neuberger Berman joins a number of money managers adding similar roles to their executive staff to accommodate asset owners’ growing demand for multiasset class solutions.
In July, former Wilshire Associates Inc. senior consultant and managing director Michael Schlachter joined Newark, N.J.-based Prudential Investment Management Inc. in the new position of managing director, multiasset-class solutions. In May, Queensland Investment Corp., Brisbane, Australia, tapped Neil Williams as managing director, multiasset and investment solutions; and in March, Paris-based BNP Paribas Investment Partners named Colin Graham CIO of the multiasset team and head of tactical asset allocation and research.
“The demand for multiasset products is rising,” said Yariv Itah, managing partner at management consulting firm Casey, Quirk & Associates LLC, Darien, Conn. “We think this is a long-term trend; it’s not cyclical.”
Mr. Itah added that because many institutional investors are now looking at multiasset class solutions as the core of their portfolios, he believes the investment management industry will see more money managers continuing to hire multiasset CIOs or similar roles.
“I think it’s a good hire,” said Charles A. Skorina, founder of the eponymous San Francisco-based executive search firm of Mr. Knutzen’s position. He noted Mr. Knutzen “has advised on investing institutional assets for years. He knows how to advise on a highly diversified portfolio.”
Mr. Skorina speculated that Neuberger Berman also brought Mr. Knutzen on board because the firm “may be tired of competing with 8,000 long-only managers and are trying to expand and deepen their business and improve their margins, because margins are brutal in institutional equity long-only.”
“Clients are driving this growing demand for multiasset solutions,” said Jane M. Mancini, senior vice president and asset manager sector head at State Street Corp., Boston, in an interview. “A bigger percentage of institutional investors now have the attitude of, ‘keep me safe, help me grow.’”
“This is a classic example of clients leading the industry. It’s where the puck is going,” said Peter R. Simon, a partner and co-head of the global asset management practice at executive search consulting firm Spencer Stuart Asset Management, Toronto, about multiasset class solutions.
Describing the growing demand for multiasset class solutions “an extension of the outsourced CIO movement,” Mr. Simon added that because midlevel asset owners now want to be as nimble as the large-scale pension plans in Canada and the U.S., they are now managing their portfolios on a multiasset basis. And in turn, money managers have been hiring either multiasset class CIOs or investment strategists.
"Plan sponsors are moving beyond style-box thinking and looking to their managers to add as much value as possible," said Mr. Knutzen, adding that asset owners are seeking multiasset class solutions because “they’re grappling with an environment where return expectations are low and the risk environment seems more complex.”
