The Universities Superannuation Scheme has acquired a $135 million stake in the $1.77 billion Neuberger Berman Secondary Opportunities Fund II. This makes USS the fund’s largest limited partner. The seller was the Lehman Brothers Estate, which retains a $50 million position in the fund.
The Universities Superannuation Scheme (USS) has expanded its private equity investment programme by acquiring a $135 million interest in the Neuberger Berman Secondary Opportunities Fund II from the Lehman Brothers Estate. With this acquisition USS becomes the largest investor in the $1.77 billion fund raised in July 2008.
“We welcome USS as a limited partner in our latest fund,” said Brian Talbot, managing director and global head of secondary private equity at Neuberger Berman. “USS is a sophisticated investor and well respected in the private equity community. The fact that USS was interested in assuming such a large commitment to our fund is a strong vote of confidence in our team and strategy.”
“This investment gives us a fantastic opportunity to gain more exposure to the secondary private equity returns with a highly experienced team, and strengthen our relationship with NB Alternatives,” said Mike Powell, head of alternative assets at USS. “The transaction was led by our co-investment team at USS, an area of increasing focus as we continue to expand our private equity investment programme.”
“This investment shows strengths of our opportunistic approach to private equity in general and co-investments in particular. We now have the resources to move quickly and commit significant capital to transactions with attractive risk adjusted returns such as this one,” said Geoffrey Geiger, co-investment portfolio manager at USS.
The NB Secondary Opportunities Fund II is managed by an experienced team which has closed more than $4 billion in secondary transactions since 1991. Along with Mr. Talbot, the fund is run by managing directors Ethan Falkove and Tristram Perkins.
Following the USS transaction, the Lehman Brothers Estate retains an approximately $50 million interest in the fund.
About The Universities Superannuation Scheme
USS is the second largest private sector pension fund in the United Kingdom and the principal pension scheme for UK universities, acting for 395 universities and academic institutions. It has in excess of £28 billion in assets as of December 31 2009, and approximately 265,000 members. USS currently has approximately 10% of its assets allocated to alternative investments, with a target to grow this allocation to 20% over the medium term. Within alternative investments, USS has made sizable commitments to private equity fund managers and is also making investments directly into private equity transactions, since 2008, USS has made eight direct investments, averaging £15million each.
About Neuberger Berman
Established in 1939, Neuberger Berman is one of the world’s largest private, independent employee-controlled asset management companies, managing approximately $173 billion in assets as of December 31, 2009. Neuberger Berman is a leader in providing a broad range of global investment solutions to institutions and individuals through customized separately managed accounts, mutual funds and alternative investment products. Neuberger Berman managed $14 billion in alternatives as of December 31, 2009, including private equity secondaries and coinvestments and private equity and hedge funds of funds. For more information please visit our website at www.nb.com.