Neuberger Berman is closing in on a $5 billion goal for its flagship fund to buy secondary private equity stakes as investors flock to the strategy.
The New York-based manager is expected raise at least half of its target in its initial phase of fundraising, also called a first close, by the end of this year, according to people familiar with the matter. That would come on top of $4 billion Neuberger already raised this year for a related strategy.
Neuberger executives will commit at least $50 million to the fund, said the people, who asked not to be named discussing confidential details. A prior iteration of the strategy collected $4.9 billion in 2022.
A representative for Neuberger Berman declined to comment.
Secondary funds are a bright spot in a persistently tough money-raising environment for private markets investors. Such funds raised $43 billion in the first half of this year, according to Bain & Co.
More limited and general partners are tapping the secondary market to generate liquidity for their private assets portfolios. That’s led to a record $103 billion of transaction volume in the first half of this year, up 51% from $68 billion in the first half of 2024, according to Jefferies Financial Group Inc.
Neuberger Berman’s latest vehicle will invest in a mix of limited partner and general partner transactions focused on middle-market companies, continuing the strategy of the predecessor vehicle. The fund targets smaller concentrated portfolios to generate better returns, and deploys capital alongside the separate GP-led strategy in some continuation funds as well, the people said.
Neuberger managed about $22 billion of secondary assets as of March.
Written by: Preeti Singh @Bloomberg
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