spring 2017 meeting slides - mccombs school of business/media/files/msb/development/… · ryan...
TRANSCRIPT
T
SPRING 2017 ADVISORY BOARD
MEETING
WELCOMEAND CALL TO ORDER
SARA ORTWEINChair, Cockrell School of Engineering Advisory Board
UPDATE FROM THE TOWER
GREGORY FENVESPresident, The University of Texas at Austin
UPDATE ON THEMcCOMBS SCHOOL
JAY HARTZELLDean, McCombs School of Business
Jay C. Hartzell, Dean
Dean’s Update
School Highlights
Students
Faculty and staff
Alumni engagement
Rowling Hall
McCombs Scholar of the Year
Branding/Marketing Study
Dean’s Update
School Highlights: Students
Student Success
National competitions: Six National Championships
National women’s case competition
Application strength and trends
School Highlights: Students
School Highlights: Graduate Student Stories
TR Geng — from China moved to US at age 18
PhD in Mathematics
Texas Venture Labs helped him gain business skills to get a job at BCG
Giving back by mentoring current TVL students
Ryan Crouser — Master of Science in Finance – May 2016 Top of his MSF Class
Competed in the Rio 2016 Olympics and won gold
Patrick Puryear — Master of Science in Marketing – May 2017
Graduate of United States Military Academy at West Point
Served in the US Army for 8 years and currently serves in the Texas Army National Guard
After graduation will go to work for JP Morgan as a Product Strategy Associate
School Highlights: Graduate Student Stories
School Highlights: Faculty and Staff
Faculty and Staff
Associate Dean for Research — Dr. Susan Broniarczyk
New senior faculty hires — Diwakar Gupta, William Fuchs, and Gregor Matvos
Chief Marketing Officer in Residence — Teri Thompson
Rob Malcolm — Endowed Chair in Marketing Innovation
School Highlights: Alumni
Alumni Engagement
Goff Real Estate Labs
Wall Street/Bay Area for McCombs
New boards
Center for Leadership and Ethics
Entrepreneurship
Healthcare
School Highlights: Rowling Hall
John Adams Scholar of the Year Award
Eila R. Motley, Finance and Business Honors Program, May 2018
McCombs Brand Refresh Project Update
McCombs Brand Steering Committee
Rob MalcolmMcCombs Executive in Residence
Lamar Johnson Associate Director, Center for Customer Insight and Marketing Solutions
Teri ThompsonMcCombs CMO in Residence
Stephen LimbergGraduate Programs Associate Dean
Shannon HicksonBBA Assistant Director, Career Services
Wayne HoyerChair, Marketing Department
Susan BroniarczykProfessor in Marketing
Erin Nelson McCombs Advisory Council, Exec. VP and CMO, SunPower
Paul KinscherffMcCombs Advisory Council, VP Corporate Development, Boeing
Jolene Hood AshcraftMBA Marketing Manager
David WengerDirector of Communications
Janaya LavalaisBBA Representative, UBC, BBA International Office
Simi FafoworaMBA Representative, Marketing Fellows
Brand Audit
Competitive Review
Quantitative and
Qualitative Discovery
PHASE 1 PHASE 2 PHASE 3 PHASE 4
Brand Cornerstones
Positioning Development
Design/Messaging
Concepting and Development
In-market Execution
(tagline, updated look-and-feel,
etc.)
Complete May-June Jul-Aug Aug-Sept
Progress Update
193 qualitative respondents:Group discussions 9 Program leader/director groups
4 student focus groups
Interviews 11 Select faculty/staff
8 Power influencers and advisory council members
9 Corporate partners and recruiters
10 External deans/professors
4 Higher education reporters/writers
1 MBA consultant
3 International partners
2,227 quantitative respondents: Alumni/Advisory Council –– 668
Current Students – 435
Faculty/Staff – 152
Prospective Students – 222
CBHS Panel – Fielding – 250
Parents Panel – Fielding – 250
Prospective Grads Panel –250
Phase 1: Discovery
1. Business education is highly undifferentiated space; despite
decades of built up equity, few of the top-end business school brands
stand out with their strategy or messaging
2. The market-level conversation is about features shared by nearly
every business school – leadership, innovation, diversity
3. In order to stand out, McCombs must build a brand that extends
beyond traditional notions of leadership
Competitive Analysis
McCombs performs well on the attributes that are most important to various audiences
McCombs is credited with being at the forefront of innovation and entrepreneurship
McCombs benefits from the University of Texas at Austin’s strong research reputation
McCombs students embody the competitive yet collaborative nature of Texas
Austin is an even more powerful differentiator
1
Topline Findings: Areas of Strength
2
3
4
5
“Chicago, Wharton, HBS…they think they know everything, or are too good to do certain things.
McCombs guys don’t have a chip on their shoulder. They’re happy in teams, work hard. They know the hours are brutal, but they’re happy to do it, no attitude of ‘I’m too good to work ‘til 2am.’ ”
— CORPORATE RECRUITER
“The people who come here are problem solvers, they're people who aren't afraid to kind of get in there, roll up their sleeves, get their hands dirty, do the work.”
— INTERNAL LEADERSHIP
Competitive Yet Collaborative
“You can sell the Austin experience, whether SXSW, the
culture, the entertainment scene. It’s a unique
city…There’s so much happening in the tech space, I
think Austin has the ability to be not a Silicon Valley, but
certainly in that space in terms of the tech scene and
entrepreneurial scene that is there. That’s what I would
be leveraging.”
— ASPIRANT DEAN
Austin is a Differentiator
Creating the Businesses of Tomorrow“When someone chooses to go
to McCombs, it says that
they’re looking to the future.
The future of business is in
places like Austin, and they
want to be a part of that.”
— HIGHER ED MEDIA
“Who's going to create the
businesses of tomorrow?
I think that’s where we want
to hang our hat, and the
combination of the business
curriculum and the access to
these high growth businesses
in a growing dynamic city like
Austin.”
— POWER INFLUENCER
Creating the Businesses of Tomorrow
EnterprisingEnergetic, ambitious, adventurous, collaborative, cooperative, industrious, entrepreneurial, agile, dynamic, pioneering, risk takers
TenaciousPersistent, grit, hard-working, dogged, unyielding, “do-ers”, action-oriented, hopeful, fit, initiative
Curious
Inquisitive, singular, inquiring, questioning, innovative, flexible, open
AuthenticReliable, honest, transparent, credible, inclusive, accountable, generous, friendly
Brand Core
BRAND CORNERSTONESDRAFT – WORK IN PROGRESS
1. Many jobs as we know them today will not exist in the future
2. Disruption will accelerate and come from unexpected places
3. Distributed leadership will proliferate
4. People will hone leadership skills through immersive experiences
5. Clarity, grit, humanity and fitness will be qualities that enable next-
gen leaders
6. Generation Z has a high degree of hope and optimism
Institute for the Future: Key takeaways
McCombs School of Business students are:
“Fit for the future….”
Transformative learning experiences built on a foundation of groundbreaking research, head-turning faculty, and a symbiotic relationship with one of the fastest growing and future-oriented cities in the world create seekers with the clarity and stamina to lead the dynamic organizations of the future.
DRAFT – WORK IN PROGRESS
Creating Leaders of the Future
1. The only certainty about the future is that certainty will cause failure.
We build agile leaders with the clarity and curiosity to navigate exponential disruption.
2. Top-down leadership will lose effectiveness; winning businesses will be those who constantly shift their shapes with leadership often coming from the edges.
We prepare leaders not only to be CEOs but to effectively lead in a variety of situations. We train for leadership fitness – persistence of body, mind, and heart.
DRAFT – WORK IN PROGRESS
Brand Manifesto
3. Future business talent thrives on discovery, iteration, and adaptation in the face of uncertainty and constant change.
We move beyond conventional notions of going to business school to only study specific business disciplines. We equip students to actively explore and mix diverse disciplines so they can lead in endeavors the world is only beginning to comprehend.
DRAFT – WORK IN PROGRESS
Brand Manifesto
4. Knowledge will have an increasing impact on the business world.
We treasure curiosity, discovery, and clarity in both research and teaching. We encourage and reward relevant groundbreaking research and knowledge creation that have the power to shape the changing practice of business.
5. The future of innovation isn’t just on the coasts.
Innovation is in Austin where smart, imaginative thinkers and doers gather to solve seemingly unsolvable problems in novel ways.
DRAFT – WORK IN PROGRESS
Brand Manifesto
UPDATE ON THECOCKRELL SCHOOL
SHARON WOODDean, Cockrell School of Engineering
John HaltonASSOCIATE DEAN FOR DEVELOPMENT
• Retiring after 42 years of service toUT Austin
• Cockrell School has raised over $720 million under his leadership
• John C. and Cheryl M. Halton Engineering Excellence Endowment: $190,000
• John C. Halton III Seminar RoomEER 0.708
Chris HigginsCHIEF DEVELOPMENT OFFICER
• Joined the Cockrell School in February
• Previously the Assistant Dean for Advancement and Alumni Relations in the College of Law at the University of Illinois at Urbana-Champaign
On the Rise
2018 RankingsU.S. News & World Report
Ranked No. 9 Best Graduate Program in the U.S.
$180.8 MillionTotal 2015-16 Research Expenditures
66% Federal
20% Industry
9% State
5% Nonprofit/Foundation
Graduate Specialty Rankings2018 RankingsU.S. News & World Report
No. 1 Petroleum
No. 4 Civil
No. 4 Environmental
No. 6 Chemical
No. 7 Computer
No. 8 Aerospace
No. 8 Electrical
No. 11 Mechanical
Center for World University Rankings2017 Rankings
No. 1 Mathematics, Interdisciplinary Applications
No. 2 Engineering, Petroleum
No. 3 Engineering, Multidisciplinary
No. 8 Transportation
No. 9 Engineering, Aerospace
No. 10 Mechanics
2017 RankingsU.S. News & World Report
Ranked No. 11 Best Undergraduate Program in the U.S.
Undergraduate Specialty Rankings2017 RankingsU.S. News & World Report
No. 1 Petroleum
No. 3 Chemical
No. 4 Civil
No. 7 Computer
No. 7 Environmental
No. 8 Aerospace
No. 9 Electrical
No. 9 Mechanical
No. 14 Biomedical
Undergraduate Enrollment
• Over 38% increasein undergraduate enrollment over the past 20 years
0
2,000
4,000
6,000
8,000
1996 2000 2004 2008 2012 2016
Undergraduate En
rollm
ent
Graduation Rates
• Over 54% increase in number of BS degrees awarded in the past 20 years
0
500
1,000
1,500
2,000
1996 2000 2004 2008 2012 2016
Number of BS Degrees
Conferred
Diversity and Inclusiveness
No. 3 Number of B.S. Degrees to URM Students in the U.S.Diverse: Issues in Higher Education
No. 15 Number of B.S. Degrees to Women in the U.S.American Society for Engineering Education
Honors and Awards
Jade JacksonSenior, ChE
Garrett MaplesSenior, ECE
Texas Exes President’s Leadership Award
David Allen
National Academy of Engineering
Professor, ChEMelvin H. Gertz Regents Chair in Chemical Engineering
For contributions to improving air quality and for developments in the education and practice of sustainable engineering.
Delia Milliron
2017 Norman HackermanAward
Welch Foundation
Associate Professor, ChEFellow of the Henry Beckman Professorship; Fellow of the Frank A. Liddell, Jr. Fellowship in Chemical Engineering
Deji Akinwande
2016 Moore Inventor Fellow
Gordon and Betty Moore Foundation
Associate Professor, ECEDavid & Doris Lybarger Endowed Faculty Fellowship in Engineering
Nicholas Peppas
American Academy of Arts and Sciences
Professor, BME and ChECockrell Family Regents Chair in Engineering #6
National Academy of Inventors
John GoodenoughProfessor, ME and ECE
S.V. SreenivasanProfessor, ME
Yale Patt
2017 Friar Centennial Teaching Award
The Friar Society
Professor, ECEErnest Cockrell Jr. Centennial Chair in Engineering
Ramesh Yerraballi
Dads’ Association Centennial Teaching Fellowship
The University of Texas at Austin
Distinguished Senior Lecturer, ECE
Record-Breaking Media Placement
Development of next-gen rechargeable battery technology
John Goodenough
Advancing the Engineering Campus
Engineering Education and Research Center
Energy Engineering Building (EEB)
Highest priority in the Cockrell School’s Strategic Master Plan (updated 2014)
Focus for energy education and research within the Cockrell School
Address the severe shortage of wet research laboratory space
Board of Regents committed $100 million in PUF bond proceeds
Advantages of LocationProminent location
Site accommodates efficient floor plan
Utility connections are optimized
Modern building for ASE/EM
CurrentSchedule
Select Architect of Record (21 Mar 2017)
Programming (31 July 2017)
Board of Regents’ approval of schematic design (9 Nov 2017)
Board of Regents’ approval of detailed design (17 May 2018)
@CockrellSchool
BREAK
Conference Break Area
ADVANCEDMANUFACTURING
JOE BEAMANProfessor, Mechanical Engineering
DAVID LEIGHSenior VP of Emerging Technologies, Stratasys
Additive Manufacturing (Solid Freeform Fabrication, 3D Printing)
External Advisory BoardsSchools of Engineering & Business
April 21, 2017
Joseph J Beaman
Advanced Manufacturing & Design Center
University of Texas at Austin
Early GoalFabrication of complex freeform solid objects directly from a computer model of an object without part‐specific tooling or human intervention.
Art to Part
Voxel Manufacturing ‐ 1985
Layered Manufacturing,Additive Manufacturing
Early Commercial Systems
Sterolithography
Selective Laser Sintering
Three critical enabling innovations in the 1980’s
Economic Lasers: power & information
Solid Modeling: 3D geometry information
The PC: Information processing
SLS History at UT
Early (1987) SLS
First Parts
First Machine
Early (1988) SFF Roller & HeatFeed Hopper Heat Lamp
Roller
First SLS System
DTM Corporation
• Texas Startup company 1989
• Started by UT student, faculty, entrepreneurs
• Grew to ~ 100 employees ~$25 million annual sales
• Now part of 3D Systems
• Spun off other commercial entities
UT Develops 1st SLS Machine (Deckard & Beaman)
UT Commercializes to DTM
First Commercial SLS Parts Sold
1988
Ti, SuperAlloy SLS Parts
SiC Laser Sintered Parts (indirect)
Custom Nylon Ankle‐Foot Orthotics
Flame Retardant Nanocomposites SLS Characterization
Next Generation High Temperature Polymer SLS Testbed
Silicon Infiltrated Silicon Carbide Fuel Reformer
1987
1989First SLS Direct Metal Parts &
First SLS machine sold to Sandia1992
1998
2014
2011
2002
2010
2007
BAMBI
UT Historical AM Contributions
Strength
Accuracy
3D Printing – Concept Models
Prototypes
Machining Forms
PatternsManufacturing
SFF Markets
Direct Manufacture
(A) Conventional Duct fabricated from Vac Formed plasticPart Count = 16 (plus glue)
(B) Component modified and consolidated for fabrication via Additive Rapid Direct Manufacture
Part Count = 1
Part Count = 1
Courtesy of 3D Systems / Boeing
Short Runs are Important for SFF
From: Anderson, C., Wired Magazine
Barriers to Additive Manufacturing
• Surface finish
• Production speed
• Cost
– Machines
– Materials
• Variation from part to part– Inadequate process control
• Materials availability
LAMPS Machine (AFRL)
OCT Laser (boresightedwith CO2 laser)
David Leigh
• Entrepreneur in Additive Manufacturing
• Developed the best Additive Manufacturing Service Bureau in SLS
• Commercial Activities in Central Texas
3D Printing Timeline
3D Printing Timeline
3D Systems (SLA) –1988
3D Printing Timeline
3D Systems (SLA) – 1988EOS (SLA) – 1990DTM (SLS) – 1990
3D Printing Timeline
3D Systems (SLA) – 1988EOS (SLA) – 1990DTM (SLS) – 1990EOS (SLS) – 1994
3D Printing Timeline
2001 - 3D Systems acquires DTM
3D Printing Timeline
2001 - 3D Systems acquires DTM- Eventually Combines Operations- EOS Enters US Market
3D Printing Timeline
2001 - 3D Systems acquires DTM- Eventually Combines Operations
3D Printing Timeline
2001 - 3D Systems acquires DTM- Eventually Combines Operations- EOS Enters US Market
3D Printing Timeline
2001 - 3D Systems acquires DTM- Eventually Combines Operations- EOS Enters US Market
• DTM (3D Systems)• Harvest Technologies (Stratasys)• Integra Services (EOS)• Advanced Laser Materials (EOS)• Solid Concepts (Stratasys)• Forecast Product Development (Alcoa)• EOS• Concept Laser (GE)
Concept Laser (GE)
EOS
Stratasys
Alcoa
Additive Manufacturing
3D Rollup
2001 Acquisition of DTM by 3D Systems
2002 First AM parts for F-18
2012 EOS acquires ALM and Integra
2012 GE acquires Morris Technologies
2014 Protolabs acquires Fineline
2014 3D Systems acquires Medical Modeling
2014 Stratasys acquires Harvest and Solid Concepts
Additive Manufacturing in US
Alaska Hawaii
2016 Venture Funding
Venture Funding in US
Alaska Hawaii
Additive Manufacturing in US
Alaska Hawaii
PRIVATE EQUITY PANEL
GARY BINNINGManaging Partner, Dominus Capital L.P.
BRIEN SMITHManaging Director, Neuberger Berman, LLC
ROBERT PARRINODirector, HMTF Center, McCombs School of Business
TRENDS AND OPPORTUNITIES IN PRIVATE EQUITYBrien Smith, COO of NB Alternative Advisers
April 21, 2017
Materials for:McCombs Advisory Council & Engineering Advisory Board Meeting
104
OVERVIEW
Private equity companies are a growing presence
U.S. Listed Companies vs. U.S. Private Equity-Owned Companies
U.S. Private Equity-Owned Companies
U.S. Listed Companies
• PE managers have a greater ability to influence both the operations and management of a business.
• Unlike a typical investor in public equity, PE investors can play a very active role in the management of its portfolio companies, and can thus dramatically improve its operating results.
• Traditionally used as a key building block for institutional investors, private equity is increasingly becoming available to a broader group of investors with the introduction of new vehicles registered under the Investment Company Act of 1940 (the “1940 Act”)
• Private equity (PE) is an investment in a company that is not listed on a public exchange.
• PE-backed companies are a growing presence, found across a wide spectrum of business sectors and stages (i.e., in start-ups, middle market and well-established enterprises).
PRIVATE, DIVERSE
TRULY ACTIVE
OPENING UP
105
P R I VAT E E Q U I T Y
PRIVATE EQUITY vs PUBLIC EQUITY
• Daily Liquidity • 10+ Year Investment
• Invested immediately • Invested over several years
• Daily market pricing • Estimated fair value on quarterly basis
• Regulated reporting • Transparency can be limited
• Typically managed to a benchmark • Managed on a cash return basis
• Little to no activism • Highly active in value creation
P U B LI C EQ U I TY
106
ADVANTAGES OF PRIVATE EQUITYPrivate equity and public stocks operate in the same economic and regulatory environment, but private equity has certain advantages
Source: Neuberger Berman.1. Source: Cambridge. Public return reflects MSCI World Index; Private Equity Return reflects the Global Private Equity Only Index. As of Q4 2014.
PUBLIC
STOCKS
10-Year Return(1): 6.0%15-Year Return(1): 3.1%20-Year Return(1): 7.1%
PRIVATE
PRIVATE EQUITY
10-Year Return(1): 12.6%15-Year Return(1): 11.3%20-Year Return(1): 13.3%
On the Buy
On the Sell
• Access to private information
• Opportunity to diligence management and operations
• Use of financing structures
• Less efficient market
• Multiple options for exit, including IPO and sale
• Ability to position the company for exit
During the Hold
• Ability to control change and hold management accountable
• Focus on operational improvements and long-term success
On the Buy
On the Sell
• Limited to no information advantages
• Efficient market
• Limited to no ability to “position” company at sale
During the Hold • Limited to no ability to effect change
107
RISKS OF PRIVATE EQUITY
• Once invested, the LP’s money is locked up for several years, until distribution or the end of the fund’s life
• Exiting the investment early can be challenging
‒ Secondary markets are inefficient and relatively small, but are evolving and becoming more important liquidity providers.
• Range of potential returns is wider than that implied by relatively low periodic mark-to-market volatility
• Fund performance depends on broad economic conditions when capital is drawn and invested, equity market conditions when exit liquidity is being sought, and the skill of the GP.
• Investment values are estimates until investment is realized
• FAS 157 accounting rules have introduced more discipline into the process of quarterly valuation marking
• Fund life typically lasts 7-12 years, depending on strategy
• It is difficult to know the ultimate success of fund until most investments are realized
• This creates a large amount of uncertainty and makes the asset class difficult to evaluate over short time frames
Liquidity
Volatility
Imprecision in Valuation
Long-term nature of the private equity investment cycle
108
CURRENT MARKET ENVIRONMENT
CURRENT MARKET
• Charged political environment stemming from Brexit and U.S. elections
• High valuations across asset classes
• Robust financing markets
• Potential future public market volatility
WHAT DOES THIS MEAN FOR PRIVATE EQUITY?
Source: NB Alternative Advisers
109
PRIVATE EQUITY BUYOUT VOLUMESSolid volumes over the last four years, particularly in the United States
0
50
100
150
200
250
2009
2010
2011
2012
2013
2014
2015
2016
US LBO Volume Europe LBO Volume
Source: S&P Leveraged Buyout Quarterly Review . EU volume converted at average FX rate during period.
110
PRIVATE EQUITY MARKET VALUATIONS: COMPARISON TO PUBLIC MARKETS (U.S.)• U.S. private equity valuations appear to be easing • Private equity valuations continue to exhibit a persistent discount vs public markets
8.8x 8.7x 8.8x9.7x 10.3x 10.0x10.2x 10.6x
12.7x
15.9x17.5x
19.9x
0x
2x
4x
6x
8x
10x
12x
14x
16x
18x
20x
2011 2012 2013 2014 2015 2016US Private US Public
Source: S&P Leveraged Buyout Quarterly Review. Bloomberg.Note: Public multiples based on Russell 2000.
PUBLIC VS. PRIVATE VALUATIONS (EV/EBITDA MULTIPLES)
111
PRIVATE EQUITY MARKET VALUATIONS: COMPARISON TO PUBLIC MARKETS (EUROPE)• European private equity valuations are beginning to show a discount vs public markets
8.8x9.3x
8.7x
10.0x9.2x
10.0x
8.7x 9.0x9.6x
10.1x 10.2x
12.9x
0x
2x
4x
6x
8x
10x
12x
14x
2011 2012 2013 2014 2015 2016Europe Private Europe Public
Source: S&P Leveraged Buyout Quarterly Review. Bloomberg.Note: Public multiples based on MSCI Europe Small Cap.
PUBLIC VS. PRIVATE VALUATIONS (EV/EBITDA MULTIPLES)
112
CAPITAL CONTRIBUTIONS VS. DISTRIBUTIONS FOR GLOBAL BUYOUT FUNDSGlobal buyout funds have been cash flow positive for the past six years
-$200
-$100
$0
$100
$200
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 2016Contributions Distributions Net cash flows
1. Source: Bain Global Private Equity Report 2017.
CAPITAL CALLS VS. DISTRIBUTIONS ($BN)1
113
BUYOUT NET ASSET VALUESThe rise in contributions and valuation has not been enough to offset distributions, so overall NAV is declining
$469
$589 $610 $660 $696
$662 $610
$101
$90 $88 $64 $96 $81
-$77 -$112 -$129 -$155
-$194 -$184
$96 4292
12664
51
$0
$200
$400
$600
$800
2010 2011 2012 2013 2014 2015 2016NAV Contributions Distributions Valuation change
1. Source: Bain Global Private Equity Report 2017.
GLOBAL BUYOUT NAV ($BN)1
114
COMPARISON OF PRIVATE AND PUBLIC EQUITY RETURNS• Private equity has performed well in absolute and risk-adjusted terms vs. public equities• Private equity has outperformed public markets on a medium- and long-term basis
6.9%
11.1%
5.1%
10.3%
12.3% 12.3%
0%
2%
4%
6%
8%
10%
12%
14%
MSCI World All Private Equity MSCI World All Private Equity MSCI World All Private Equity
15-YEAR 10-YEAR 5-YEAR
Past performance is not indicative of future results. Represents the investment horizon for Global Private Equity and Venture Capital Index from Thomson Reuters as of September 30, 2016, which is the latest data available.
COMPARISON OF HORIZON RETURNS – PUBLIC VS. PRIVATE
115
HOW DOES THE CURRENT U.S. POLITICAL ENVIRONMENT AFFECT OUR INVESTMENTS?
• Overall policy uncertainty
• Potential swing to protectionism
• Potential tax law changes
• Potential infrastructure spending
• Potential deregulation
Source: NB Alternatives.
116
OUR VIEWS
• We believe private equity is the most nimble asset class for taking advantage of change
• Whenever you have industries / companies that are in need of restructuring, consolidation, etc., these are all areas that play to the advantage of private equity
• Relative to other asset classes, private equity is particularly well adapted to take advantage of these changes
– Private equity has the ability to invest only when they find an attractive opportunity
– Private equity managers generally control their portfolio company’s businesses and have the operating resources to affect change
– Private equity managers are generally aligned with the interests of the management teams and investors
– Private nature allows managers to focus on proper multi-year strategy, not quarterly earnings
• While the inherent long-term structure of private equity is suited for the current market environment, investors should be patient and remain both discerning and opportunistic with new investments
Source: NB Alternatives.
117
SUMMARY RISK FACTORSProspective investors should be aware that an investment in any NB Private Equity Fund (the “Fund” or “Funds”) is speculative and involves a high degree of risk that is suitable only for those investors who have the financial sophistication and expertiseto evaluate the merits and risks of an investment in the Fund and for which the Fund does not represent a complete investment program. An investment should only be considered by persons who can afford a loss of their entire investment. Thefollowing is a summary of only certain considerations and is qualified in its entirety by the Confidential Private Placement Memorandum of the Fund (the “Memorandum”) and prospective investors are urged to consult with their own tax and legal advisorsabout the implications of investing in the Fund. Fees and expenses can be expected to reduce the Fund’s return.
Market Conditions. The Fund’s strategy is based, in part, upon the premise that investments will be available for purchase by the Fund at prices that the Fund, the general partner of the Fund (the “General Partner”) considers favorable and which arecommensurate with the targeted returns described herein. To the extent that current market conditions change or change more quickly than Neuberger Berman Group, LLC or an affiliate (“Neuberger Berman”) currently anticipates, investmentopportunities may cease to be available to the Fund or investment opportunities that allow for the targeted returns described herein may no longer be available.
No Assurance of Investment Return. There can be no assurance or guarantee that the Fund’s objectives will be achieved, that the past, targeted or estimated results presented herein will be achieved or that investors in the Fund (“Investors”) willreceive any return on their investments in the Fund. The Fund’s performance may be volatile. An investment should only be considered by persons who can afford a loss of their entire investment. Past activities of investment entities sponsored byNeuberger Berman provide no assurance or guarantee of future results. The Fund’s intended strategy relies, in part, upon the continuation of existing market conditions in certain countries (including, for example, supply and demand characteristics orcontinued growth in GDP) or, in some circumstances, upon more favorable market conditions existing prior to the termination of the Fund. No assurance or guarantee can be given that investments meeting the Fund’s investment objectives can beacquired or disposed of at favorable prices or that the market for such investments (or market conditions generally) will either remain stable or, as applicable, recover or improve, since this will depend upon events and factors outside the control of theFund’s investment team. Notwithstanding anything in this presentation to the contrary, Neuberger Berman or the General Partner may vary its investment processes and/or execution from what is described herein.
Legal, Tax and Regulatory Risks. Legal, tax and regulatory changes (including changing enforcement priorities, changing interpretations of legal and regulatory precedents or varying applications of laws and regulations to particular facts andcircumstances) could occur during the term of the Fund that may adversely affect the Fund or its partners.
Performance of the Fund and No Operating History. The Fund and the General Partner are newly-formed entities with no operating history for prospective investors to evaluate.
Default or Excuse. If an Investor defaults on or is excused from its obligation to contribute capital to the Fund, other Investors may be required to make additional contributions to the Fund to replace such shortfall. In addition, an Investor mayexperience significant economic consequences should it fail to make required capital contributions.
Indemnification. Under certain circumstances, the Fund is responsible for indemnifying the General Partner and its affiliates for losses or damages.
Leverage. The Fund’s investments are expected to include underlying portfolio companies whose capital structures may have significant leverage. These companies may be subject to restrictive financial and operating covenants. The leverage mayimpair these companies’ ability to finance their future operations and capital needs. The leveraged capital structure of such investments will increase the exposure of the portfolio companies to adverse economic factors such as rising interest rates,downturns in the economy or deteriorations in the condition of the portfolio company or its industry.
Highly Competitive Market for Investment Opportunities. The activity of identifying, completing and realizing attractive investments is highly competitive, and involves a high degree of uncertainty. There can be no assurance or guarantee that theFund will be able to locate, consummate and exit investments that satisfy the Fund’s rate of return objectives or realize upon their values or that it will be able to invest fully its committed capital.
Reliance on Key Management Personnel. The success of the Fund will depend, in large part, upon the skill and expertise of certain Neuberger Berman professionals. In the event of the death, disability or departure of any key Neuberger Bermanprofessionals, the business and the performance of the Fund may be adversely affected.
Potential Conflicts of Interest. There may be occasions when the General Partner and/or advisors to the Fund and their affiliates will encounter potential conflicts of interest in connection with the Fund’s activities including, without limitation, theactivities of Neuberger Berman and key personnel, the allocation of investment opportunities, conflicting fiduciary duties and the diverse interests of the Fund’s limited partner group. There may be disposition opportunities that the Fund cannot takeadvantage of because of such conflicts.
Limited Liquidity. There is no organized secondary market for Investors’ interests in the Fund, and none is expected to develop. There are restrictions on withdrawal and transfer of interests in the Fund.
Material, Non-Public Information. By reason of their responsibilities in connection with other activities of Neuberger Berman, certain employees of the General Partner, the advisors and their respective affiliates may acquire confidential or materialnon-public information or be restricted from initiating transactions in certain securities. The Fund will not be free to act upon any such information. Due to these restrictions, the Fund may not be able to initiate a transaction that it otherwise might haveinitiated and may not be able to sell an investment that it otherwise might have sold.
THE FOREGOING DOES NOT PURPORT TO BE A COMPLETE EXPLANATION OF THE RISKS AND CONFLICTS INVOLVED IN THIS OFFERING OR AN INVESTMENT IN THE FUND. POTENTIAL INVESTORS SHOULD READ THISPRESENTATION, THE MEMORANDUM, THE SUBSCRIPTION AGREEMENT AND THE LIMITED PARTNERSHIP AGREEMENT OF THE FUND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO INVEST IN THE FUND AND SHOULDCONDUCT THEIR OWN DILIGENCE OF THE OPPORTUNITY AND IDENTIFY AND MAKE THEIR OWN ASSESSMENT OF THE RISKS INVOLVED.
TRENDS AND OPPORTUNITIES IN PRIVATE EQUITY
118
DISCLOSURESThis document contains highly confidential information regarding investments, strategy and organization of NB Alternatives Advisers LLC (“NB Alternatives”). If you are a limited partner in any fund managed by NB Alternatives, this entire documentconstitutes “Partnership Information”, non-public information or information related to the partnership or its affairs, as applicable, and is covered by the provisions of the Confidentiality section of the applicable partnership agreement. Regardless ofwhether you are a limited partner in any NB Alternatives managed fund, your acceptance of this document from NB Alternatives constitutes your agreement to (i) keep confidential all of the information contained in this document, as well as anyinformation derived by you from the information contained in this document (collectively, “Confidential Information”) and not disclose any of the Confidential Information to any other person, (ii) not use any of the Confidential Information for any purposeother than to monitor investments in NB Alternatives’ managed funds, (iii) not use the Confidential Information for the purpose of trading any security, including, without limitation, securities of NB Alternatives’ managed funds or their portfolio companies,(iv) not reproduce this document without the prior consent of NB Alternatives, and (v) promptly return this document and any copies hereof to NB Alternatives upon NB Alternatives’ request. This document is for informational and discussion purposesonly and does not constitute an offer to sell or a solicitation of an offer to purchase any security. Any such offer or solicitation shall be made only pursuant to additional documentation relating to such fund, which documentation describes risks related toan investment in the fund as well as other important information about the fund and its sponsor. The information set forth herein does not purport to be complete and is subject to change. This document is qualified in its entirety by all of the informationset forth in any such additional documentation.
This document may include information from a number of funds managed by NBAA and its predecessors-in-interest. Neuberger Berman and its affiliates are the successor to all of the predecessors’ operational assets, and employ substantially all oftheir key personnel, and NBAA became either the advisor or sub-advisor to the funds previously advised by the predecessors. Historical information contained herein is for illustrative purposes only; such information is based on market and otherconditions at the time that may significantly change, and should not be relied upon.
Past performance is not necessarily indicative of future results. There can be no assurance that the funds described herein or their investments will achieve comparable results, that targeted, diversification or asset allocations will be met or that the fundswill be able to implement their investment strategy and investment approach or achieve their investment objectives. Actual returns on unrealized investments will depend on, among other factors, future operating results, the value of the assets andmarket conditions at the time of disposition, legal and contractual restrictions on transfer that may limit liquidity, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions and circumstances on whichthe valuations used in the prior performance data contained herein are based. Accordingly, the actual realized returns on unrealized investments may differ materially from the returns indicated herein.
Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of NB Alternatives and its affiliates. Such statements involve known and unknown risks, uncertainties andother factors, and undue reliance should not be placed thereon. In addition, this document contains "forward-looking statements." Actual events or results or the actual performance of the funds and their investments may differ materially from thosereflected or contemplated in such forward-looking statements. No representation or warranty is made as to future performance or such forward-looking statements. Financial or other projections described herein are illustrative and intended fordiscussion purposes only. Alternative assumptions may result in significant differences in such illustrative projections. Opportunities described in such illustrative projections may not be found nor is prospective performance of the type describedguaranteed, and a fund may not be able to achieve its objective or implement its strategy.
Certain economic and market information contained herein has been obtained from published sources prepared by third parties and in certain cases has not been updated through the date hereof. While such sources are believed to be reliable, neitherNB Alternatives, its affiliates nor employees assume any responsibility for the accuracy or completeness of such information.
None of Neuberger Berman Group LLC nor any of its affiliates have made any representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of any of the information containedherein (including but not limited to information obtained from third parties unrelated to Neuberger Berman Group LLC), and they expressly disclaim any responsibility or liability therefore. None of Neuberger Berman Group LLC nor any of its affiliateshave any responsibility to update any of the information provided in this document.
This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Information is obtained from sources deemed reliable, but there isno representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.Neuberger Berman products and services may not be available in all jurisdictions or to all client types. Investing entails risks, including possible loss of principal. Investments in hedge funds and private equity are speculative and involve a higherdegree of risk than more traditional investments. Investments in hedge funds and private equity are intended for sophisticated investors only. Indexes are unmanaged and are not available for direct investment. Past performance is no guarantee offuture results.
All information as of December 31, 2016, except as otherwise noted. Firm data, including employee and assets under management figures, reflect collective data for the various affiliated investment advisers that are subsidiaries of Neuberger BermanGroup LLC (the “firm”). Investment professionals referenced include portfolio managers, research analysts/associates, traders, and product specialists and team dedicated economists/strategists.
The views expressed herein include those of those of Neuberger Berman’s Asset Allocation Committee which comprises professionals across multiple disciplines, including equity and fixed income strategists and portfolio managers. The AssetAllocation Committee reviews and sets long-term asset allocation models and establishes preferred near-term tactical asset class allocations . The views of the Asset Allocation Committee may not reflect the views of the firm as a whole and NeubergerBerman advisers and portfolio managers may recommend or take contrary positions to the views of the Asset Allocation Committee. The Asset Allocation Committee views do not constitute a prediction or projection of future events or future marketbehavior. Due to a variety of factors, actual events or market behavior may differ significantly from any views expressed. This material may include estimates, outlooks, projections and other “forward-looking statements.” Due to a variety of factors,actual events may differ significantly from those presented.
The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC.
© 2017 Neuberger Berman Group LLC. All rights reserved.
TRENDS AND OPPORTUNITIES IN PRIVATE EQUITY
Dual Honors Degrees
Associate Professor, McCombs School of Business
JAY HARTZELLDean, McCombs School of Business
SHARON WOODDean, Cockrell School of Engineering
CARLOS CARVALHO
Dual DegreesBusiness Honors + Engineering
BHP + Engineering
• Main idea: create dual degrees between McCombs and Cockrell by combining honors business education with strong, technical and computational skills.
• Focus: tech innovation, product development, entrepreneurship, business analytics.
• Honors Focus: unique experience, dedicated small cohort courses. Aim to attract top talent from Texas and beyond. ~50 students per cohort.
• Austin and UT offer a perfect environment for such programs.
“... dual degree academic program globally providing future leaders with exceptional opportunities to combine engineering andbusiness knowledge in designing and implementing cutting‐edge solutions to important commercial and social problems.”
“You’ll get hands‐on practice turning great ideas into real‐world solutions... Match your engineering talent with business expertise and become the kind of entrepreneurial leader the world needs.”
“... it is crucial to build and offer a challenging and rigorous program that provides graduates with skills and experiences that will make them successful in the future.”
“Understanding both entrepreneurship and product development is crucial for success in the current business environment where innovation, understanding markets, and knowing how what you do contributes to the bottom line are all keys for success.”
MS Business Analytics
• 10-month program: combination of business and data science classes.
• 3 graduated classes: 55 students per cohort.
• Salary: $89,000 on average ($125,000 top)
• Notable employers: Capital One, Booz Allen Hamilton, Facebook, IBM, Indeed, Deloitte, PwC, Wal-Mart, McKinsey, AT&T, GoPro, Starbucks, NFL, Amazon, Google, USAA
BHP + BSA in CS blueprintCore Curriculum 54 hours 2 Science, 2 Liberal Arts, etc
Business Courses 38 hours
2 ACC, 3 BA, 2 ECO, 1 MIS, 2 STA, 1 FIN, 1 MAN, 1 MKT,1 LEB
CS Courses 35 Hours 6 core CS, 4CS electives
Total 127 Hours
Challenges for Dual Degree with Engineering
Existing Dual Degree and Joint Degree Programs
• Geosystems Engineering and Hydrogeology• Joint with Jackson School of Geosciences• Students receive BS from Cockrell School• 132 hr
• Architectural Engineering / Architecture• Dual degree with School of Architecture• 197 hr (minimum of 6 years to complete)
• Engineering and Plan II Honors• Dual degree with College of Liberal Arts
(Typically takes 5 years to complete)
BHP + ME blueprintCore Curriculum 44 hours 2 Math, 2 PHY, 1 CH
Business Courses 38 hours
2 ACC, 3 BA, 2 ECO, 1 MIS, 2 STA, 1 FIN, 1 MAN, 1 MKT,1 LEB
Engineering Courses 58 Hours18 ME, 2 Math, 2 EM,2 PHY Labs
Total 140 Hours
Curriculum Integration
• Linking courses: summer session program connecting the two degrees.
• Practicum: experiential learning program focused on innovation, product development and entrepreneurship.
• Example: Rice’s Engineering Design Kitchen.http://oedk.rice.edu/about
TEXAS 4000STUDENT PRESENTATION
ERIC HIRSTSenior Associate Dean for Academic Affairs,
McCombs School of Business
Sharing Hope, Knowledge and Charity from Texas to Alaska
MISSIONCultivate student leaders.
Engage communities in the fight against cancer.
CHRIS CONDIT, FOUNDERCockrell School of Engineering B.S. in Biomedical Engineering, 2004, M.S.E., 2011
• Diagnosed with Stage III Hodgkin’s Lymphoma at age 11
• As a student at UT, founded Texas 4000 for Cancer, a leadership program cultivating UT students to engage communities in the fight against cancer
• Rode in the 2004 inaugural ride more than 4,500 miles from Austin, Texas, to Anchorage, Alaska with fellow students from Cockrell School of Engineering
• Currently, Senior R&D engineer at Abbott’s Neuromodulation division
Chris Condit (Center) with 2004 Riders in Austin
2004 Riders in Alaska
600+ Students from the University of Texas at Austin have participated
90+ Riders from the Cockrell School of Engineering
60+ Riders from the McCombs School of Business
Kris Novak, 2017 RiderSenior, Electrical Engineering
Catherine Butschi , 2017 RiderSenior, MPA
TEXAS 4000 LEADERSHIP PROGRAM
An 18‐month Leadership Development Program for students at The University of Texas at Austin
Three Core Pillars – Hope, Knowledge, & Charity
Eight Foundational Leadership Skills• Self Awareness• Communication• Resiliency• Efficient Planning• Peer Respect• Situational Leadership• Technical Knowledge & Skills• Vision & Action
Culminates in a 70‐Day Ride of 4,500 Miles along Three Routes from Austin, Texas, to Anchorage, Alaska
Over 70 Student Riders participate annually and each one:
• Logs more than 2,000 training miles prior to the summer ride
• Volunteers more than 50 hours during the program
• Raises at least $4,500 to help fight cancer
Students plan the entire ride from Austin to Anchorage
Students share cancer prevention information locally and throughout the communities along the ride
Texas 4000 Riders in San Francisco
Cancer Prevention Presentation by the Riders
TEXAS 4000 CHARITY MILESTONES
More than $7 million donated toward Cancer Research and Support Services
Highlights
• Donated more than $605,000 to the UT Austin Department of Biomedical Engineering for seed grants and to establish an endowment
• Donated more than $1,455,000 to the UT MD Anderson Cancer Center
• Donated more than $130,000 to the UT Southwestern Medical Center for research to explore the metabolism of cancer cells and identify targets in lung cancer cells
Sharing Hope, Knowledge and Charity from Texas to Alaska
TEXAS 4000 SUPPORT ACROSS THE COUNTRY
Texas 4000 Alumni and Texas Exes support riders across the country during the summer ride by hosting riders, organizing dinners, local cancer prevention speaking engagements, and fundraisers benefitting Texas 4000.
WAYS TO BE INVOLVED
Mentor a student rider—share your time with the teamHire a rider—you won’t find better talent!Ride with us on June 3—the Atlas RideBring your friends and join us at the Tribute Gala, August 25th
Become a donor—financial support fuels our mission
Scott CrewsExecutive Director
Texas 4000 for Cancer
[email protected]‐300‐2318 office512‐2975037 cell
www.Texas4000.org
Eric HirstBoard Chair
Texas 4000 for Cancer
Senior Associate DeanMcCombs School of BusinessUniversity of Texas at Austin
INTERESTED IN LEARNING MORE?
GENESIS PROGRAM
VIVEK SAKHRANIPresident, Longhorn Engineering Advisory Delegation (LEAD)
JACOB CORDOVAVice President, Longhorn Engineering Advisory Delegation (LEAD)
Genesis Program Executive Director
LEAD
LEAD
Engage recent alumni
Enhance the engineering student experience
LEAD
imealentreasuret LEAD
Engage recent alumni
Enhance the engineering student experience
LEAD
imealentreasuret LEAD Task
forces
Engage recent alumni
Enhance the engineering student experience
1st of its kind at UT AustinEarly stage funding
Applied learning
Jeff AusterGenesis Director of Development Chemical Engineering 2019
Solution to a critical need
https://www.youtube.com/watch?v=gM6xVy1F6g0
Michael JohnsGenesis Director of OperationsFinance and Business Honors 2017
Fully interdisciplinaryRewarding excellence
Impacting the lives of students
Joint Ventures
imealentreasuret
Joint Ventures
Give First
imealentreasuret
Joint Ventures
What starts(up) here changes the world
Engage recent alumni
LEAD
WRAP UPAND ADJOURN
RAY NIXONChair, McCombs School of Business Advisory Board
TTHANK YOU