Neuberger closes new secondary fund $400 mln above target

NB Secondary Opportunities Fund III LP raised $2 billion, compared with its $1.6 billion target, as the successor to 2008’s NB Secondary Opportunities Fund II LP, which raised about $1.7 billion.

“We had significant demand from both existing and new investors,” Brian Talbot, Neuberger Berman global head of secondary investing, told Buyouts. “Secondaries are an attractive asset class for private equity investors, and our team has done a good job. We’ve performed well for our investors.”

About 50 percent of the capital came from new investors.

With more normal conditions in the world of private equity compared to five years ago and more money moving into the asset class, Talbot said the new fund’s investment period may take less than four years.

“Our pipeline is very strong,” he said. “The opportunity going forward is pretty positive.”

NB Secondary Opportunities Fund III will continue the strategy of its predecessor of pursuing secondary stakes in mid-market funds worth an average investment of $20 million, with deal sizes starting at as little as $500,000.

The fund will look at opportunities in private equity funds, direct investments, co-investments and structured private equity opportunities around the globe.

Talbot said Neuberger is mulling “several opportunities” to buy stakes in funds from general partners, as sponsors restructure their portfolios to boost liquidity.

Alongside Talbot, the fund’s investment team includes Tristram Perkins, Ethan Falkove and Benjamin Perl, all of whom have been with the firm for several years.

Neuberger, which manages $227 billion in total capital, was part of Lehman Brothers from 2003 to 2008, when it became independent through a management buyout. The firm manages about $18 billion in alternative investments and $97 billion in fixed income investments.