Neuberger Berman appears to be the latest casualty of ultra-low rates, asset outflows and rising regulatory requirements in the money market mutual fund space. A recent SEC filing for the Neuberger Berman Income Funds and Neuberger Berman Municipal Money Fund says, "The Board of Trustees of Neuberger Berman Income Funds recently approved the liquidation of Neuberger Berman Municipal Money Fund, which is scheduled to occur on or about September 28, 2010. Investors may continue to redeem shares of the Fund through the Liquidation Date."
The "Supplement to the Summary Prospectus dated February 28, 2010, as amended June 7, 2010, and the Prospectus dated February 28, 2010, as amended April 1, 2010 and May 28, 2010 continues, "Effective August 24, 2010, the Fund's shares will no longer be offered for sale to new investors. Existing shareholders of the Fund can continue to purchase shares. If you purchased shares directly through Neuberger Berman Management LLC or through an account with Neuberger Berman LLC, you should have received a letter describing alternative arrangements for the investment of your assets once the Fund is liquidated. If you purchased shares directly through Neuberger Berman Management LLC, please call 800-877-9700 with any questions. If you purchased shares through an account with Neuberger Berman LLC or another investment provider, please contact your Neuberger Berman representative or your investment provider, as appropriate, with any questions."
Neuberger Berman, the former Lehman Brothers Asset Management, ranks 61st among 81 money fund managers (tracked by Crane Data's Money Fund Intelligence XLS) with $763 million in assets (0.03% market share). The company outsourced its taxable money market funds to SSgA in July 2009. (See Crane Data's July 10, 2009, News "Neuberger Retreats From Taxable Money Funds, Outsources to SSgA" and Neuberger's July 9, 2009, press release "Neuberger Berman Selects State Street To Provide Taxable Money Market Funds To Its Clients".) The liquidations involve all three of Neuberger's remaining tax-exempt money funds, the $200 million Neuberger Berman Muni MF Invest (NMNXX), the $248 million Neuberger Berman NY Muni MF (NYNXX), and the $315 million Neuberger Berman Tax-Fr MF Res (NTFXX).
The company becomes the latest in a still small but growing line of companies to abandon or outsource its money market fund lineup. (Note that Neuberger does continue to manage "cash" though and continues to subadvise for SEI's Tax-Exempt Money Market Funds.) Other announcements of liquidation and deals this year include: AARP Money Market Fund, Eagle's Money Market Funds, Goldman Sachs' ILA money funds, RidgeWorth Money Market Funds, and Western Assets's retail brokerage money funds. (For more, see Money Fund Intelligence's August article, "Consolidation Happens: MF Mergers, Liquidations.")
In other news, see FT.com's reprint of the recent ignites.com article, "Moody's moves to improve ratings differentiation". It says, "Moody's last week proposed changes to its methodology for rating money market funds aimed at providing investors with greater transparency regarding fund characteristics and a better picture of both market and liquidity risks." (See Crane Data's Sept. 8 News "Moody's Proposes New Money Market Fund Rating Methodology, Symbols".)
