To our clients and business partners:
As I write this letter at the start of 2026, I find myself reflecting on my 32 years in this business, and on a word that feels particularly fitting for the year behind us and the one ahead: resilience. Resilience in the global economy, resilience in corporate America, and resilience in markets that continued to move forward despite an ever-changing set of headlines. Tariff developments, geopolitical uncertainty, and policy debates all took turns dominating the news cycle. Yet through it all, the underlying foundation held, and in many cases strengthened, creating a constructive environment for long-term investors.
In the United States, that resilience continues to be anchored by the consumer. While the labor market has clearly moderated from the unusually tight conditions of prior years, it remains healthy. Employment levels are still strong, real wage growth has been positive, and inflation has made meaningful progress. As a result, growth has remained steady, and the economy has continued to expand. Importantly, the market’s focus has begun to shift from inflation toward labor, which has meaningful implications for policy and portfolio construction.
As always, monetary and fiscal policy are part of the story. The Federal Reserve has moved toward easing, providing additional liquidity at a time when inflation volatility has declined. Fiscal measures enacted last year are expected to provide additional support, particularly early in 2026. Taken together, the policy backdrop is broadly supportive, but not uniform, and that unevenness is exactly where opportunity emerges for active investors.
An environment built for active management
After an extended period defined by zero interest rates and abundant liquidity, today’s market looks very different. A higher cost of capital has increased dispersion across companies, sectors, and regions. Outcomes are diverging more meaningfully, and broad averages tell a far less complete story than they once did.
In our view, this is a favorable setup for active management. When capital is no longer free, fundamentals matter more. Balance sheets matter more. Cash flows, margins, and management discipline matter more. Security selection, grounded in deep research and long-term conviction, becomes a source of opportunity rather than a constraint.
We see this clearly in fixed income. Corporate credit spreads remain tight by historical standards, but they are tight for a reason: corporate fundamentals have generally been solid, earnings and cash flows have held up, and demand for income remains strong. In this environment, returns are earned not by avoiding markets, but by doing the work: identifying issuers and structures where the market is mispricing durability, change, or improvement.
Equity markets tell a similar story. While valuations deserve respect, earnings growth has broadened, leadership has diversified, and dispersion has increased. That combination creates a healthier market; one that typically rewards selectivity, patience, and fundamental insight.
Building Lord Abbett for this moment
The past year has reinforced the strength and direction of Lord Abbett’s investment platform. Recognition from Barron’s for performance, along with continued acknowledgment, for the sixth consecutive year, by Pensions & Investments as a leading place to build and sustain investment talent, reflects a firm that is executing with clarity and purpose. We see these signals not as accolades, but as confirmation that our approach—grounded in discipline, alignment, and long-term thinking—is resonating in today’s market environment.
Our strategic priorities have been deliberate and consistent. We continue to expand our capabilities across public and private markets, with a particular focus on areas where we believe structural opportunity is most compelling. This includes the growth of our Alternatives platform across opportunistic credit, private credit, and private real estate, with an emphasis on structure, risk management, and alignment with client objectives. We also extended our global presence with our expansion into Singapore and Hong Kong, strengthening our ability to partner with clients and institutions in key markets worldwide.
Today, Lord Abbett oversees approximately $250 billion in assets across public and private strategies. We view this scale not as an end, but as a measure of relevance and trust built over time. Importantly, it enables continued investment in research depth, investment talent, and platform capabilities at a point in the cycle when market dispersion is elevated and thoughtful active management is increasingly valuable.
At the core of our positioning is culture. We have been intentional in building a firm that is principles-based and performance-oriented. This culture shapes how we allocate capital, manage risk, and engage with clients. Over time, we believe it is this combination of clarity of strategy, disciplined execution, and a commitment to excellence that positions Lord Abbett to be a long-term partner for clients across market cycles.
What excellence looks like
I also want to highlight a moment that reflects who we are as a firm and what our brand stands for. As a sponsored athlete, Ben Griffin quite literally wears the Lord Abbett name on his shirt, and this past year was a breakout one for him: tournament wins, competing for the U.S. at the Ryder Cup, and representing our firm with professionalism and integrity on one of the world’s biggest stages.
What makes Ben’s story especially meaningful is the journey behind the results. Just four years ago, Ben stepped away from professional golf. Today, he is among the top players in the world. His success is not an accident. It is the product of discipline, focus, resilience, and an unwavering commitment to improvement—day after day, when no one is watching. People often praise publicly what others practice in private, and Ben’s rise is a powerful reminder of what sustained effort and belief can achieve. In that sense, he represents far more than competitive success; he represents the mindset required to earn trust and perform at the highest level over time, whether in sports or in investing.
The principle that guides us
Since our founding in 1929, Lord Abbett has been guided by a simple but enduring belief articulated by Andrew Lord when he first opened our doors: an investment firm worthy of the name fosters a sound relationship between the house and the client. Those words remain etched—literally and figuratively—into our firm and our culture today.
Across generations, market cycles, and changing conditions, that principle has shaped how we invest, how we work together, and how we serve our clients. Trust is built through consistency, transparency, and doing the right thing—especially when it is difficult. It is a legacy we are proud to uphold and one we work to earn every day.
Staying in close dialogue with our clients is one of my highest priorities and you can find me occasionally sharing my thoughts on leadership and Lord Abbett’s perspectives on the markets on LinkedIn.
Thank you for the confidence you place in Lord Abbett. While we manage $250 billion in assets, we know that this money does not belong to us. We do not take it lightly, and we look forward to the year ahead.
Sincerely,
Douglas B. Sieg
CEO & Managing Partner