Neuberger Berman has concluded its latest private equity co-investment fund, which raised $2.8bn, much exceeding its initial $2.25bn target.

The fund, NB Strategic Co-Investment Partners V (Fund V), likewise outperformed its predecessor, indicating that there is still a high demand for co-investment strategies that allow direct access to private equity opportunities.

Furthermore, the completion takes Neuberger’s total client money raised for co-investment vehicles and custom accounts in the last 18 months to nearly $6bn.

The employee-owned, international investment manager with headquarters in New York currently oversees over $40bn in committed co-investment funds throughout its platform.

By collaborating with leading private equity firms from a variety of industries, business sizes, and investment phases, Fund V seeks to create a diverse global portfolio of direct equity co-investments.

Fund V’s investment base is varied, including public and private pension funds, insurance companies, foundations, family offices, and high-net-worth individuals from around the world. The breadth of this support underscores the popularity of co-investment methods, which provide investors with the possibility for high returns and greater control over capital deployment.

Joana Rocha Scaff, Neuberger’s Head of Europe Private Equity stated: “We are grateful to our investors for supporting us in this successful fundraise and continue to be excited by the market opportunity in co-investments. This Fund enables our clients to participate in distinct investment opportunities we originate by being a flexible and value-added capital solutions provider to our GP partners, especially by acting as co-underwriters of new transactions and investing mid-life in existing sponsor-owned portfolio companies, typically providing capital for growth and partial realisations.”

David Morse, Global Co-head of Co-Investments added: “Fund V stands to benefit from our leading private markets platform, with over $140bn of assets under management, built over 35 years. With a large, global and experienced team of 195+ private markets investment professionals and active investment relationships with over 380 lead sponsors, we believe we are in a strong position to continue to generate compelling investment opportunities.” 

Co-investment techniques, which enable limited partners to make direct investments in projects alongside private equity sponsors, have become more and more common in recent years. In contrast to conventional fund structures, these solutions may provide more selective exposure and reduced expenses.

Since the beginning of 2024, Neuberger Berman has raised almost $6bn in client funds for co-investments, demonstrating continued investor interest. The firm’s strategy focuses on collaborating with lead sponsors to acquire access to a high-quality deal flow.

Legal counsel for the fund was provided by Ropes & Gray LLP.