Investment firm Neuberger Berman successfully wraps up a $2.8 billion co-investment fund, outperforming its goal due to increasing demand from Limited Partners
In a significant move, Neuberger Berman has successfully closed its NB Strategic Co-Investment Partners V fund at $2.8bn, surpassing its initial target of $2.25bn. This latest fund is a testament to the growing trend in the private equity industry towards GP-aligned co-investment strategies.
Joana Rocha Scaff, Head of Europe Private Equity at Neuberger Berman, expressed gratitude to investors for the successful fundraise. She stated that the fund enables clients to participate in distinct investment opportunities Neuberger Berman originates by being a flexible and value-added capital solutions provider to GP partners.
The strategy of Fund V includes co-underwriting new transactions and investing mid-life in sponsor-owned portfolio companies. It may also provide capital for growth initiatives and partial realisations in sponsor-owned portfolio companies. Co-investment offers limited partners more selective deal access and reduced costs compared to traditional fund structures, as practiced by Fund V.
The current market trend for GP-aligned co-investment strategies is characterized by increasing institutionalization and scale, customization and flexibility, access to deal flow and diversification, rising market activity, and the expansion of hybrid and strategic models. This trend is exemplified by Neuberger Berman's recent fund, which aims to deploy large pools of capital directly with GPs, offering investors high-quality deal flow alongside General Partners (GPs), participation in fee economics, and beneficial, diversified, risk-mitigated exposure.
Legal counsel for the fund was provided by Ropes & Gray LLP. Backers of the fund include public and private pension funds, insurers, foundations, family offices, and high-net-worth individuals from around the world.
With the close of this fund, Neuberger Berman's total capital raised for co-investments and customized accounts now stands at nearly $6bn since the start of 2024. The expansion of the co-investment space allows Neuberger Berman to remain a key player in the industry. David Morse, Global Co-Head of Co-Investments, noted that Fund V will benefit from Neuberger Berman's leading private markets platform with over $140bn of assets under management.
Neuberger Berman now manages over $40bn in committed co-investment capital and $140bn in total private markets assets. The platform also has active investment relationships with over 380 lead sponsors. The success of Fund V underscores Neuberger Berman's commitment to providing innovative and strategic co-investment solutions to its clients.
[1] Increasing institutionalization and scale [2] Customization and flexibility [3] Access to deal flow and diversification [4] Rising market activity
[Reference: Private Equity International, Preqin, and Secondaries Investor]
- The strategy for Neuberger Berman's latest fund, NB Strategic Co-Investment Partners V, prioritizes growth through increased institutionalization and scale.
- The fund offers clients flexibility and customization, enabling them to participate in a wide range of distinct investment opportunities.
- Access to deal flow and diversification are key benefits of the co-investment strategy employed by Neuberger Berman's Fund V.
- The private equity industry has witnessed a rise in market activity, with Neuberger Berman's Fund V being an exemplary participant in this trend.
- Participation in Fund V offers limited partners selective deal access and reduced costs compared to traditional fund structures.
- Neuberger Berman's Fund V provides investors with beneficial, diversified, risk-mitigated exposure, offering them a chance to participate in fee economics and high-quality deal flow alongside General Partners (GPs).
- The success of Fund V has solidified Neuberger Berman's position as a key player in the co-investment space, with over $6bn in total capital raised for co-investments and customized accounts since the start of 2024.
