Neuberger Berman held the final close for its NB Private Equity Impact Fund, raising nearly $280 million in investor commitments.
The Impact Fund invests in direct and fund investments that seek to achieve positive social and environmental outcomes that are aligned with the UN Sustainable Development Goals and that also meet NB Private Equity’s traditional underwriting standards. The underlying investments are aligned with a number of relevant investment themes, such as improving health outcomes, addressing climate change and energy needs, and improving sustainable growth and employment.
Already, the new fund has committed $132 million to direct investments (co-investments), primary fund commitments and secondary transactions.
According to the firm’s fund launch announcement, investments include market-leading businesses that we believe have sound capital structures and that are generally focused on essential products and services that contribute to social and environmental solutions and therefore are less cyclical than the broader market. Examples include a point of use water filtration and dispenser company that is displacing plastic water bottles, a next generation broadband technology platform and an online tutoring solution that delivers both high-quality and affordable tutoring to K-12 students.
Overall Neuberger Berman has more than $96 billion of its $429 billion in AUM committed capital to private markets. The firm was named to the 2020 PRI Leaders Group, a designation awarded to fewer than 1% of investment firms for excellence in ESG practices.
“The Fund structure is designed to access best-in-class impact investments,” said Dominique Drenckhahn, principal at Neuberger Berman. “The direct investments help increase overall capital efficiency and mitigate the J-curve. We seek to mitigate risk through diverse exposure to top-tier managers and companies. Additionally, we track and share the Fund’s impact metrics with our limited partners.”
Backed by a global investor base, the fund’s clients include public and private pension plans, insurance companies and other financial institutions, endowments, foundations and family offices. Investors are represented across a broad geographic range including North America, Europe, Asia and Australia.
The Impact Fund is overseen by a 60-strong global team. In addition, roughly 35% fund’s senior leadership team is comprised of women and underrepresented minority backgrounds, which helps to bring a perspective uncommon in the industry, officials said.
“We believe that the Impact Fund’s focus on more essential products and services has enabled the portfolio to perform even during market turmoil,” said Jennifer Signori, managing director at Neuberger Berman. “We benefit from the scale and strength of the Neuberger Berman Private Equity platform and invest selectively as we look to make a positive impact with our capital.”