The fund aiming to be a one-stop shop for investors demanding access to private equity

Note: This interview was taped on Friday 18 October 2024.

It is no secret that alternatives are a hot investment topic - and indeed, a hot investment destination at the moment. It's not just that every firm and their dog are setting up a private market operation, it's also that businesses in all industries are now trying to get their financing needs in front of as many investors as possible.

But what makes the investors on the other end tick? And with so many options for private equity funds now out there, why should your money only go towards one fund?

To answer these pressing questions, we are joined by someone who has spent his career analysing private equity opportunities, and in particular, how opportunities can be accessed alongside other like-minded investors in a practice known as co-investing: Neuberger Berman's David Stonberg. Stonberg is on the team that manages the Neuberger Berman Global Private Equity Access Fund (AUD). 

What is your point of differentiation?

Stonberg says Neuberger Berman's biggest point of differentiation is many-fold. For one, Neuberger Berman's approach is to do deals directly alongside their fellow investors and into the companies themselves.

"There's fee efficiency in the way our model is built," Stonberg says. 

The fund is also, in Stonberg's words, truly diversified across large, medium, and small-sized enterprises and by location and industry as well. Finally, Neuberger Berman's private equity team is hundreds-strong, meaning this vehicle has access to a "waterfall" that allows investors to take advantage of the same information advantage and leading deals that other Neuberger Berman funds offer.

"We think this is a product that can be the sole private equity commitment for investors who want to use it that way," Stonberg adds.

How many deals do they see in a year?

Even in the current environment of slower M&A and IPO activity, as well as the end of a once-in-50-year interest rate hiking cycle, Stonberg says he is still seeing north of 600 co-investment opportunities a year. That equates to roughly 11 opportunities per week, a situation which Stonberg describes as "terrific". Yet despite this, at maturity, this fund may only own stakes in between 100 and 150 companies in total. 

To learn more about the fund, its investment process, and why you should be taking a closer look at allocating to private assets, watch this episode of Fund in Focus.

Timecodes

• 0:00 - Intro
• 0:38 - What is this fund's point of differentiation?
• 1:50 - The fund's investment and due diligence strategy
• 3:38 - How big is your opportunity set?
• 4:24 - What returns are you aiming for and how much should investors allocate to this asset class?
• 5:56 - Why should investors consider private markets?