Neuberger Berman’s latest global fund-of funds vehicle, the $720 million NB Crossroads 2010 Fund, plans to invest in about three to five Asian private equity managers as it seeks out funds with the potential to generate high returns.
“The portfolio overall is focused more on mid-cap and special situation managers. In Asia, that’s where our bias is in terms of the types of managers that we’re looking for,” says Hong Kong-based Brock Williams, the firm’s senior vice-president in the private equity fund-of-funds group. The minimum size of fund it would consider in Asia would be about $200 million, he adds.
The new vehicle is Neuberger Berman’s first private equity FoF since its spin-out from Lehman Brothers in 2008, and follows the Lehman Crossroads Fund XVIII, which raised $1.5 billion in 2007.
Among Fund XVIII’s 10 largest investments was an allocation to Newbridge Asia IV – a large-cap buyout fund which closed in 2005 at $1.5 billion – according to a management report by NB Private Equity Partners, the London-listed investment firm that is managed by Neuberger Berman.
Commitments to NB Crossroads 2010 largely came from North American and European investors, with a notable portion of capital coming from Latin America and South America. Japanese institutions – including pensions and insurance firms – were among the biggest investors from Asia, says Williams.
NB Crossroads 2010 will invest in private equity funds across a range of regions and investment strategies that include large and mid-cap buyouts, growth equity, venture capital and distressed investments.
It has already committed capital to 19 private equity funds and seven co-investments into companies with other funds, in addition to acquiring secondary stakes in 15 private equity funds from existing investors.
Neuberger Berman oversees about $183 billion in total AUM through a range of investment vehicles, including hedge FoFs and mutual funds.