Firm: Neuberger Berman
Fund: Neuberger Berman Strategic Co-Investment Partners Fund II LP
Target: $750 Million
Amount Raised: $1.1 Billion
The sophomore fund is the successor to Neuberger’s debut co-investment fund, which was launched in 2006 with $1.6 billion in commitments.
David Morse, a managing director at the firm and co-head of the team that oversees the fund, said in a statement, “We estimate that Fund II will have in excess of 30 portfolio company investments across multiple industries, geographies, enterprise value sizes, transaction types, vintage years and premier lead managers.”
The fund is earmarked for investments alongside private equity firms that syndicate out a portion of their equity deals. Investors making co-investments typically do so on the same terms as the private equity firms they partner with. As a result, they do not have to pay the 20 percent carry that is standard for most investors in private equity funds.
But since Neuberger Berman is making co-investments on behalf of its own investors, the firm does plan to charge a carry, according to a source at the firm not authorized to discuss fees and terms. The source said that the carry fee would be scaled according to the size of a client’s investment, and that it would be substantially less than the standard 20 percent carry fee charged by most private equity funds.
The new fund will primarily invest in buyouts and growth equity across a variety of industries and countries. So far, according to the firm, the new fund has made nine investments totaling $185 million.
Neuberger said that there are 25 investors in the new fund, including public pensions, endowments, foundations, corporate pensions and insurance companies. Investors are based in North America, Asia, Europe and Latin America.
Neuberger Berman was spun out from the now-bankrupt Lehman Brothers, and sold largely to the firm’s employees. The firm oversaw more than $205 billion in capital as of December 2012.