Is There a Bubble in Private Credit? This CEO Weighs In. | At Barron's

Why It Matters

Understanding Newberger Berman’s conservative stance on private credit and its employee‑owned model helps investors gauge systemic risk and identify firms that align client outcomes with sustainable growth, a crucial factor as private credit becomes a larger share of institutional portfolios.

Key Takeaways

• Newberger Berman is 100% employee‑owned with 817 owners.
• Business split: ~33% equities, 33% fixed income, 33% alternatives.
• Alternatives, especially private credit, are growing but remain conservatively managed.
• CEO sees no systemic risk bubble; private credit reduces portfolio volatility.
• Employee ownership drives higher compensation, retention, and client‑focused investment.

Summary

The Barron’s interview centers on Newberger Berman’s CEO George Walker assessing whether a bubble exists in private credit and explaining how the firm’s unique employee‑owned structure shapes its strategy. Walker outlines the firm’s $5.5‑$6 billion AUM, its three‑way business split—roughly a third each in equities, fixed income and alternatives—and the steady organic growth of its non‑equity units since the 2008 Lehman collapse.

Walker stresses that while alternatives, particularly private credit, have attracted substantial institutional capital, Newberger Berman has taken a deliberately cautious approach. The firm avoids the rapid, leverage‑heavy fundraising seen elsewhere, preferring co‑investments and continuation vehicles that prioritize underwriting quality over short‑term performance spikes. From his perspective, the expansion of private credit actually lowers portfolio risk by shifting assets from volatile public markets into more stable, illiquid investments.

The conversation also highlights the firm’s cultural DNA: a 100% employee‑owned model with 817 owners, a legacy art collection inherited from founder Roy Newberger, and a spin‑off into Blue Owl that keeps employee equity separate from operating risk. Walker notes that this ownership structure allows the firm to allocate a larger share of revenue to compensation and technology, driving exceptional retention and client‑centric incentives.

For investors, the takeaway is that private credit is unlikely to burst in a classic bubble; instead, it will mature as a risk‑mitigating asset class. Newberger Berman’s disciplined, employee‑owned model may serve as a competitive moat, offering steadier returns and alignment of interests that could appeal to institutions seeking long‑term, low‑volatility exposure.

Original Description

George Walker, CEO of Neuberger Berman, spoke about the firm's art collection, alternative investments, and much more.

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