By Daniel Lanyon on 20th October 2016
The asset manager has closed its latest private debt fund, helping boost its alternatives business in terms of the amount of assets under management.
Neuberger Berman has seen its alternative credit arm ramp up with the launch of the NB Private Debt Fund II, which has closed on $750m of limited partner commitments.
There has been a secular trend of increasing magnitude in recent years of bank disintermediation in the US and Europe that has seen asset managers step into the lending market as small and medium sized companies demand growth capital.
The firm’s new fund seeks to invest in the junior debt of private equity-backed companies, including unitranche loans, second lien loans, and mezzanine debt securities.
The news follows Monroe Capital closing its second private debt fund this week at $800m as well as spate of new launches and hires in the space including at NN Investment Partners, AXA Investment Managers and BNP Paribas.
Including the new fund, Neuberger Berman manages approximately $2.3bn of committed capital focused on investing in the credits of private-equity backed companies in both the primary issuance market and through secondary purchases, the firm said in statement.
Concentrating on the middle market in the US, an area hardest hit by the pull back in lending by banks, the average investment size across the business is between $50m and $100m.
The fund's investor base is comprised of more than 25 institutions, including public and private pensions, insurance companies, and foundations from North America, Europe, and Japan. The new fund targets investments in North American companies with EBITDA of $25m to $250m, and at final close, was 28 per cent invested in 15 companies.
Susan Kasser and David Lyon co-manage the Private Credit business at Neuberger Berman. Kasser says the team are seeing “growing opportunities” in private debt.
Neuberger Berman, which was founded in 1939, manages equities, fixed income, private equity and hedge fund portfolios for institutions and advisors worldwide and offices in 19 countries. It manages a total of $255bn in client asset.