Investment firm, Neuberger Berman, successfully shuts down a $2.8 billion joint venture fund, surpassing its goal due to rapid acceleration in investor demand.
In the thriving co-investment market, Neuberger Berman has made a significant stride with the final close of its NB Strategic Co-Investment Partners V fund at $2.8 billion. This fundraising event underscores the strong investor appetite for co-investment strategies, which are becoming increasingly popular due to their benefits over traditional fund structures.
Joana Rocha Scaff, Head of Europe Private Equity at Neuberger Berman, expressed her gratitude to investors for the successful fundraise. She highlighted that Fund V benefits from Neuberger Berman's leading private markets platform, which manages over $140 billion of assets and has active investment relationships with over 380 lead sponsors.
Fund V is designed to provide capital for growth initiatives and partial realisations. Its strategy includes co-underwriting new transactions and investing mid-life in sponsor-owned portfolio companies. This approach offers reduced costs and increased transparency to limited partners (LPs), allowing them to maximise net returns and have more influence on deal selection.
David Morse, Global Co-Head of Co-Investments, mentioned that Fund V will benefit from Neuberger Berman's private markets platform. He emphasised that the fund enables clients to participate in distinct investment opportunities Neuberger Berman originates. The fund surpassed its initial target of $2.25 billion, attracting backing from public and private pension funds, insurers, foundations, family offices, and high-net-worth individuals from around the world.
The co-investment space is currently robust and growing, with assets under management (AUM) in co-investments growing globally at 20–25% annually since 2020 and exceeding $2.5 trillion. Co-investments offer LPs a way to bypass higher traditional management fees and carried interest, making them an attractive option for investors seeking greater control and transparency.
However, the growth in retail investor participation in private markets poses potential challenges to co-investment deal flow, as institutional LPs worry about dilution of institutional exposure and competitive conflicts from larger retail capital inflows.
Despite these challenges, the rise of co-investment funds, like Neuberger Berman’s, reflects a broader trend where diversified co-investment vehicles offer LPs enhanced diversification and performance potential amid challenging market conditions. These funds rely on strong GP relationships, access to quality deal flow, and deep due diligence capabilities to identify and execute attractive investments globally. Market dislocations create unique co-investment opportunities, increasing the appeal of such funds.
In conclusion, Neuberger Berman’s $2.8 billion raise for NB Strategic Co-Investment Partners V confirms that the co-investment market is vibrant, increasingly institutionalized, and central to private equity strategy—offering significant benefits for both LPs and GPs in today’s market environment.
[References] [1] Neuberger Berman. (n.d.). Neuberger Berman Completes Final Close of NB Strategic Co-Investment Partners V at $2.8 Billion. Retrieved from https://www.nb.com/news-and-insights/press-releases/neuberger-berman-completes-final-close-of-nb-strategic-co-investment-partners-v-at-2-8-billion [2] Private Equity International. (2024, March 1). Neuberger Berman raises $2.8bn for co-investment fund. Retrieved from https://www.peimedia.com/news/11321885/neuberger-berman-raises-2-8bn-for-co-investment-fund [3] Pensions & Investments. (2024, March 2). Neuberger Berman raises $2.8 billion for co-investment fund. Retrieved from https://www.pionline.com/article/20240302/ONLINE/161132994/neuberger-berman-raises-2-8-billion-for-co-investment-fund [4] Financial Times. (2024, March 3). Neuberger Berman raises $2.8bn for co-investment fund. Retrieved from https://www.ft.com/content/02994c8a-584f-42e2-b698-d0a439425c85
- The final close of Neuberger Berman's NB Strategic Co-Investment Partners V fund at $2.8 billion is a testament to the strong investor appetite for co-investment strategies.
- Joana Rocha Scaff, Head of Europe Private Equity at Neuberger Berman, expressed gratitude to investors for the successful fundraise.
- Fund V benefits from Neuberger Berman's leading private markets platform, which manages over $140 billion of assets and has active investment relationships with over 380 lead sponsors.
- Fund V is designed to provide capital for growth initiatives and partial realisations, and its strategy includes co-underwriting new transactions and investing mid-life in sponsor-owned portfolio companies.
- The co-investment space is currently robust and growing, with assets under management (AUM) in co-investments growing globally at 20–25% annually since 2020 and exceeding $2.5 trillion.
- Co-investments offer LPs a way to bypass higher traditional management fees and carried interest, making them an attractive option for investors seeking greater control and transparency.
