Neuberger Berman Secures $1 Billion for Real Estate Investment Project

Neuberger Berman has raised an impressive $1.05 billion for its new real estate secondary opportunities fund, named NB Real Estate Secondary Opportunities Fund II (RESOF II). This fund aims to invest in mature real estate assets by acquiring interests in established real estate funds, offering liquidity and recapitalization for various projects.

RESOF II surpassed its initial fundraising target of $800 million, with the amount raised exceeding the $712 million raised for its predecessor. The fund primarily targets the middle market, with significant focus on the U.S. and European markets, tapping into the growing secondary real estate market.

This move further establishes Neuberger Berman as a key player in the real estate investment sector, enabling them to provide lucrative investment opportunities to their clients. The strategy behind RESOF II revolves around accessing seasoned real estate assets at attractive prices. By focusing on secondary investments, the fund aims to offer investors compelling risk-adjusted returns, which are achieved by acquiring assets that may not be available through traditional investment channels.

Scott Koenig, head of Neuberger’s real estate secondaries business, highlighted the long-term opportunities in the real estate secondary market, reflecting confidence in the strategy’s ability to generate strong returns for investors. The secondary market, which deals with the resale of interests in real estate funds, continues to grow, offering a wider range of opportunities for those with the right expertise.

This strategy is particularly appealing to investors seeking diversification and those looking to invest in real estate at more favorable prices compared to direct investments. One of the significant advantages of the secondary market is that it allows investors to purchase interests in funds that are already established and have a proven track record.

This means that RESOF II has the advantage of investing in projects that have already matured or are in advanced stages of development, making it less risky than new or untested real estate investments. The strategic focus on the U.S. and Europe provides the fund with access to some of the most stable and lucrative real estate markets in the world.

By tapping into these regions, Neuberger Berman aims to maximize returns by acquiring properties in well-established, high-demand areas. The fund’s diversified approach ensures that it can withstand market fluctuations and continue to deliver strong returns over the long term. With this fundraising success, Neuberger Berman plans to expand its team and further strengthen its position within the real estate secondaries market.

The growth of the firm’s resources and relationships with global real estate managers provides an additional edge when sourcing and underwriting investments. Ted Rykowski, a managing director at Neuberger Berman, emphasized that the company’s disciplined approach to secondary investing, which has been honed over decades, positions the fund well to identify and execute high-quality real estate investments.

The team’s extensive experience, combined with the broader support of Neuberger’s private markets platform, will enable them to make informed and strategic decisions that benefit both their investors and the wider real estate market. The launch of RESOF II marks an important milestone in Neuberger Berman’s strategy to offer diversified investment opportunities within the real estate sector.

As the global real estate market continues to evolve, the secondary market presents a unique opportunity for investors looking to capitalize on the value of mature, high-quality assets. By leveraging their expertise, Neuberger Berman aims to provide clients with access to a differentiated investment strategy that combines the stability of real estate with the flexibility of secondary market investing.

This initiative is a testament to the company’s commitment to providing clients with innovative solutions that generate long-term value in the ever-changing world of real estate investment.