Neuberger Berman, the $300 billion financial giant that owns Martha Stewart's brand, is betting its future on a SWAT team of data scientists
- Neuberger Berman, the financial giant that owns the brand of Martha Stewart, is expanding its team of data scientists in a bid to attract and retain investor dollars.
- Leading the charge is Mike Recce, the financial giant's chief data scientist who the firm hired from Singapore sovereign wealth fund GIC in 2017.
- This expansion in data comes as investors are demanding more granular insights into how their money is being put to use.
Mike Recce wants to check out your job postings.
He's not looking for work -- he joined $300 billion asset manager Neuberger Berman in 2017 as chief data scientist from Singapore sovereign wealth fund GIC and likes his job.
Rather, he wants to understand what the openings say about the direction of your company.
"We analyze the nature of how a company is hiring," says Recce, of his data team at Neuberger Berman. "This lets investors understand [a company's] relative health."
This type of analysis is important to Neuberger when it's evaluating what companies - both public and private - it should invest in. Even after that, Recce continues to dig up data when measuring the performance of an investment.
As firm executives looks to the future, it is betting that data will play an increasingly significant role in attracting and retaining investor dollars.
Ever since Recce joined the financial giant, the data unit has expanded from just Reece himself to nine total in little more than two years. The firm is now looking to add even more talent, posting a job ad on LinkedIn earlier this week for a New York-based data scientist.
"We are continually growing," says Recce.
The team supports all of Neuberger Berman's 560 investment professionals across the firm, including in equity, fixed income and alternatives. But private equity -- where data is hard to come by -- is where the team is especially helpful, says Tony Tutrone, head of alternatives at the firm.
Of Neuberger's $75 billion private equity arm, its Dyal unit, which buys minority stakes in private equity firms, is its most well known business on Wall Street. It also owns the smaller but glamorous Marquee Brands, which manages brands including Martha Stewart and Bruno Magli.
"Data has always been a challenge in the private markets," says Tutrone, noting that public companies report their data on quarterly basis.
To fill in the void, the firm has compiled its own data set for the private markets, which has entailed purchasing data -- like aggregated job postings and anonymized credit card transactions -- from outside vendors. At the same time, it has relied on its own information about the companies it owns.
"Just the information we have on how industries are performing and how economies are performing... we can see things others won't for months," Tutron says.
To be sure, Neuberger Berman isn't the only firm beefing up its data prowess.
KKR announced last month that it hired the top technology officer from Northwestern Mutual and said that a data-approach to investing will play a central role in the firm's evolution. Meanwhile, Blackstone has also gone quant, hiring Matt Katz from Point72 Asset Management to lead a data team informing the firm's investment decision-making.
The trend comes from a fundamental shift in the relationship between firms and their investors, Tutrone says.
These days, he observes, investors who cough over capital to spend in the private markets aren't willing to stand by idly and wait out their returns.
That's different from when Tutrone started his career at Lehman Brothers in 1986 as an investment banker. Back then, all investors generally asked for was the names of the companies private equity firms would invest their money in, some high level information on what the companies did and their performance.
"In the old days the relationship was different," he says, of investors' relationships with their money managers. "They just wanted the [private equity firm] to give them back more money than they gave them originally. Now, they are demanding much, much more."