- Leads NorthBound Emerging Managers Private Equity Fund
- Platform also co-invests, makes private debt investments
- Headed diversity business initiative at Lehman Brothers
From 2004 to 2006, Patricia Miller Zollar worked on a project at Lehman Brothers called the Partnership Solutions Group, “focused on creating new business opportunities with women- and minority-owned financial-services firms,” she said. “It was a firmwide initiative to make diversity a part of what people do every day, as opposed to something outside the business.”
The way to accomplish that, the group reasoned, was to find opportunities to partner with diverse professionals across businesses in which Lehman was involved: asset managers, broker-dealers, M&A advisers. While searching, “We started to see that more and more were finding their way to private equity.”
Zollar, who graduated from Harvard Business School in 1989, was introduced to PE during a post-MBA rotation at NationsBank (now part of Bank of America). She remembers being struck by one deal in particular, a roll-up of a child-care center: “I thought it was fascinating … talking to these businesses and understanding what they’re doing, and thinking about how you could help create that value.”
But the buyout world was still relatively small and insular, and Zollar moved on to roles at Deloitte & Touche and Goldman Sachs. By the mid-2000s, however, PE “wasn’t just a little cottage industry anymore. It was certainly starting to attract a large amount of capital, and we were starting to see enough women and minorities going into investment banking to get the requisite experience and start their own funds.”
Lehman had recently acquired a PE fund-of-funds business, which was “thinking about the next opportunity,” Zollar said. With the bigger pools of capital drawing more and more attention, “we thought there was an opportunity to identify these smaller funds that might be hungrier, that might have different sets of deals that they were looking at, that might have greater alignment of interests.”
The result was NorthBound Equity Partners, which Zollar leads as a managing director at Neuberger Berman. Its first emerging-managers fund was raised in 2007, with clients including Lehman and several insurers. When Lehman went under in 2008, the fund’s assets were bankruptcy-remote, but transferring them to the Neuberger Berman group still required client approval.
“Clients could have obviously said no, but everybody stayed with us,” Zollar said. “Private equity as an asset class, and especially emerging managers really showed their mettle because it was tested during that period of time.”
Zollar said NorthBound looks for long-term relationships. “Our platform lends itself to that. An initial primary investment should also lead to the ability to co-invest with these managers. We have a debt business that can support the debt in some of these sponsor-backed companies.” Another division of Neuberger Berman, Dyal Capital Partners, has twice bought a stake in the management company of Vista Equity Partners, in whose first institutional fund NorthBound invested.
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Patricia Miller Zollar, managing director, Neuberger Berman. Photo courtesy of the firm.