Investment firm Neuberger Berman successfully shuts down a $2.8 billion co-investment fund, surpassing its goal due to a surge in investor demand.
Neuberger Berman, a leading global investment manager, has successfully closed NB Strategic Co-Investment Partners V at a staggering $2.8 billion. This marks a significant milestone in the expanding co-investment sector.
Joana Rocha Scaff, Head of Europe Private Equity at Neuberger Berman, expressed her gratitude to investors for the successful fundraise. David Morse, Global Co-Head of Co-Investments, stated that Fund V will benefit from Neuberger Berman's leading private markets platform, which manages over $140 billion of assets under management and has active investment relationships with over 380 lead sponsors.
Since the beginning of 2024, Neuberger Berman has raised nearly $6 billion for co-investments and customized accounts. With this latest fund closing, the firm now manages over $40 billion in committed co-investment capital.
A Maturing Co-Investment Landscape
The growing trend in GP-aligned co-investment strategies, as exemplified by Neuberger Berman's Fund V, is characterized by GPs offering co-investments as a way to tackle larger deals beyond their flagship funds, spread risk, and deepen alignment with select LPs through closer deal underwriting involvement.
These co-investments typically involve lighter fees and more direct governance or reporting access for investors, allowing GPs to raise additional capital efficiently while giving LPs more tailored and potentially higher-return opportunities.
More broadly, this trend reflects a shift towards diversified, customized investment structures that offer LPs access not only to asset-level returns but also to GP-platform economics, including fees and carried interest. This can provide alternative alpha sources and downside protection in a market environment where traditional opportunistic returns have become harder to achieve.
The Advantages of Co-Investing
Key features of this growing trend include the use of co-investments and sidecar structures to handle deals too big for main funds alone, favorable fee economics for co-investors, enhanced LP engagement via richer reporting and governance rights, increasing demand for co-invest opportunities, diversification benefits by accessing GP economics alongside asset returns, and family offices playing a more active role as capital providers.
Fund V's strategy includes co-underwriting new transactions and investing mid-life in sponsor-owned portfolio companies. The fund's backers include a variety of institutions such as public and private pension funds, insurers, foundations, family offices, and high-net-worth individuals from around the world.
The co-investment space offers limited partners more selective deal access and reduced costs compared to traditional fund structures. Legal counsel for Fund V was provided by Ropes & Gray LLP.
Neuberger Berman continues to be a significant player in the expanding co-investment sector, and Fund V exemplifies a maturing, large-scale co-investment vehicle that aligns GP and LP interests through bespoke deal participation, governance, and risk sharing.
- Neuberger Berman, a leading global investment manager, closed NB Strategic Co-Investment Partners V at a substantial $2.8 billion, marking a significant milestone in the expanding co-investment sector.
- Joana Rocha Scaff, Head of Europe Private Equity at Neuberger Berman, thanked investors for the successful fundraise, noting that Fund V will benefit from Neuberger Berman's leading private markets platform.
- Since the beginning of 2024, Neuberger Berman has raised nearly $6 billion for co-investments and customized accounts, now managing over $40 billion in committed co-investment capital.
- GPs, like Neuberger Berman, are offering co-investments as a way to tackle larger deals, spread risk, and deepen alignment with select LPs through closer deal underwriting involvement.
- Co-investments, such as those in Fund V, typically involve lighter fees and more direct governance or reporting access for investors, allowing GPs to raise additional capital efficiently while giving LPs more tailored and potentially higher-return opportunities.
- The co-investment space offers limited partners more selective deal access and reduced costs compared to traditional fund structures, with legal counsel for Fund V provided by Ropes & Gray LLP.
- Fund V's strategy includes co-underwriting new transactions and investing mid-life in sponsor-owned portfolio companies, with a variety of institutions such as public and private pension funds, insurers, foundations, family offices, and high-net-worth individuals from around the world serving as its backers.
