Neuberger Berman launches inaugural debt fund

A regulatory filing did not offer a target for the firm’s inaugural effort in this space, NB Private Debt Fund LP, but it did identify Susan Kasser as an executive officer of the fundraising effort. Kasser joined the firm last spring as managing director and head of private debt at Neuberger Berman Alternatives. She previously had been at The Carlyle Group, where she was a founding member of Carlyle Mezzanine Partners.

A spokesman for Neuberger Berman declined to comment on the firm’s plans for the private debt market, citing the ongoing fundraising effort. The firm does, however, have a page on its website dedicated to the Neuberger Berman “private debt platform.” There it says it seeks to offer second-lien, mezzanine and unitranche financing of $10 million to $35 million to companies with EBITDA of $10 million to $250 million or more in North America and Europe.

Although it is only now raising its first dedicated debt fund, the firm has a long history with the buyouts business. Neuberger Berman’s private equity group traces its roots to the Crossroads Group, a funds-of-funds firm founded in 1987 which was later sold to Lehman Brothers, sister news service Reuters has reported. The business was grouped under Neuberger Berman, which was spun off soon after Lehman’s bankruptcy in 2008.

The firm got into the co-investment business in 2006, when it launched a dedicated fund that attracted $1.6 billion in commitments. It closed a second co-investment fund in March 2013, with $1.1 billion in commitments, well ahead of its $750 million target, as Buyouts reported at the time.

The firm also has been pushing into the separate accounts business. The Texas Permanent School Fund, a $26 billion fund benefiting the state’s public schools, committed $900 million to such a program last April, and the Wyoming Loan and Investment Board, which manages $16 billion in natural resource and land trust funds, committed $200 million to Neuberger Berman around the same time as part of a larger $600 million commitment to separate managed accounts over the next three to five years.

Neuberger Berman also announced last May that it had hired 22 investment professionals specializing in emerging market debt, 19 of whom joined the firm from ING Investment Management. And in November it closed a private equity secondaries fund at $2 billion, above its $1.6 billion target.