Private equity firm Neuberger Berman successfully concludes a $2.8 billion co-investment fund, surpassing its goal, due to an increase in investor interest.
The co-investment space is witnessing significant growth, as evidenced by the recent closing of Neuberger Berman's NB Strategic Co-Investment Partners V at $2.8bn. This fund, which surpassed its $2.25bn target, is part of the expanding co-investment landscape and aims to offer more selective deal access and reduced costs.
Neuberger Berman, a global investment manager, now manages over $40bn in committed co-investment capital and $140bn in total private markets assets. The fund will target a globally diversified portfolio of direct equity co-investments alongside leading private equity sponsors.
David Morse, Global Co-Head of Co-Investments at Neuberger Berman, expressed his confidence in Fund V, stating that it stands to benefit from the firm's leading private markets platform. Joana Rocha Scaff, Head of Europe Private Equity at Neuberger Berman, expressed gratitude to investors for supporting the successful fundraise.
The strategy of Fund V includes co-underwriting new transactions and investing mid-life in sponsor-owned portfolio companies. This approach offers LPs an alternative to traditional fund investments, potentially yielding better risk-adjusted returns by mitigating some costs and capturing economics directly linked to specific portfolio companies.
The increasing interest in GP-aligned co-investment strategies is due to their ability to deepen alignment between General Partners (GPs) and Limited Partners (LPs), offering LPs more direct exposure to specific deals with reduced fees and enhanced returns. Ropes & Gray LLP provided legal counsel for Neuberger Berman's Fund V.
The co-investment strategy of Neuberger Berman's Fund V is not an isolated event. It represents a broader trend where investors seek innovative ways to support and benefit from private equity managers. This includes GP seeding and staking, where investors back GPs early or participate in management company economics to align interests and capture a share of fee income and carried interest.
Neuberger Berman continues to be a significant player in the expanding co-investment space. The close of Fund V brings the firm's total capital raised for co-investments and customized accounts to nearly $6bn since the beginning of 2024. The fund enables Neuberger Berman's clients to participate in distinct investment opportunities they originate by being a flexible and value-added capital solutions provider to their GP partners.
In conclusion, the growing demand for GP-aligned co-investment strategies like Neuberger Berman's $2.8bn NB Strategic Co-Investment Partners V reflects the market's shift towards strategies that align and share conviction between GPs and LPs, supporting long-term growth and performance in the private equity landscape.
- Neuberger Berman, a global investment manager, now manages over $40bn in committed co-investment capital.
- The NB Strategic Co-Investment Partners V fund, recently closed at $2.8bn, is part of the expanding co-investment landscape.
- David Morse, Global Co-Head of Co-Investments at Neuberger Berman, expressed confidence in Fund V, believing it benefits from the firm's leading private markets platform.
- The fund aims to offer more selective deal access and reduced costs to investors.
- The strategy of Fund V includes co-underwriting new transactions and investing mid-life in sponsor-owned portfolio companies.
- The increasing interest in GP-aligned co-investment strategies like Neuberger Berman's Fund V is due to their ability to deepen alignment between General Partners (GPs) and Limited Partners (LPs).
- The close of Fund V brings Neuberger Berman's total capital raised for co-investments and customized accounts to nearly $6bn since the beginning of 2024.
