Neuberger Berman Closes $1.05 Billion Real Estate Secondary Fund Exceeding Investment Targets
Neuberger Berman has successfully closed its second real estate secondary fund, the NB Real Estate Secondary Opportunities Fund II (RESOF II), raising a total of $1.05 billion. This is a significant achievement as the fund surpassed its original target of $800 million, demonstrating strong investor confidence in the real estate secondary market.
The fund is focused on acquiring stakes in mature real estate funds, providing liquidity to limited partners, and recapitalizing existing real estate assets. It targets middle-market real estate opportunities in both the U.S. and Europe, regions where Neuberger Berman believes it can be more selective with its investments. This approach is meant to maximize value by focusing on asset-by-asset underwriting instead of acquiring broad portfolios.
The investor base for the RESOF II fund is diverse and includes corporate and public pension funds, endowments, foundations, insurance companies, family offices, and high-net-worth individuals from North America, Europe, and Asia. Employee and limited partner commitments also contributed to the fund’s oversubscribed close, which indicates the strong interest in this real estate secondary market.
The success of this fund is part of Neuberger Berman’s broader strategy to tap into the growing demand for real estate secondary market investments. Real estate secondaries involve buying stakes in real estate funds from investors looking to exit their positions before the end of the fund’s term, offering a more flexible and often less risky investment option.
RESOF II primarily focuses on real estate secondaries in the U.S. and Europe. Neuberger Berman’s strategy is to find high-quality assets in these regions where the firm can apply its bottom-up, asset-by-asset underwriting approach. This allows them to be more discerning with their investments, ensuring that they acquire properties at attractive valuations.
Unlike other investment strategies that focus on large portfolios, Neuberger Berman’s approach emphasizes individual asset opportunities, which they believe leads to better long-term value creation for their investors. The firm’s strategy also focuses on maximizing risk-adjusted returns, which is a key consideration for institutional investors looking to balance growth with security.
The success of this fund continues a trend for Neuberger Berman, which raised $712 million for its previous real estate secondary fund. The real estate secondary market has grown significantly in recent years as more institutional investors look for liquidity options in their real estate holdings. This trend is expected to continue as more investors seek ways to manage their portfolios amidst changing market conditions.
Neuberger Berman sees significant potential for continued growth in this market, with the firm positioning itself as a key player in providing solutions for investors in need of liquidity or seeking to rebalance their portfolios. The success of the RESOF II fund is a clear indication that there is robust demand for such investment strategies.
Scott Koenig, the head of Neuberger Berman’s real estate secondaries business, expressed excitement about the long-term opportunities in the real estate secondary market. He highlighted the trust investors have placed in the firm and emphasized the firm’s goal of building a well-diversified portfolio of seasoned real estate assets.
By acquiring these assets at attractive valuations, Neuberger Berman aims to generate compelling returns for its investors while maintaining a focus on risk management. The real estate secondaries market offers unique opportunities for value creation by providing liquidity options for investors in existing real estate funds. Neuberger Berman’s success in raising $1.05 billion for RESOF II is a clear demonstration of the firm’s strength and expertise in navigating this niche segment of the real estate market.
Currently, Neuberger Berman manages a total of $508 billion across various asset classes, including equities, fixed income, private equity, real estate, and hedge funds. This diverse range of investment vehicles positions Neuberger Berman as a leading player in the alternative investment space.
The firm’s success in closing the RESOF II fund further solidifies its position in the market and demonstrates its ability to attract significant institutional capital. As more investors seek to diversify their portfolios and explore new investment opportunities, Neuberger Berman’s expertise in real estate secondaries places it in a strong position to continue capitalizing on these market trends.
The growth of the real estate secondaries market is expected to continue, driven by the increasing demand for liquidity from institutional investors and the ability to acquire high-quality assets at attractive valuations. As global real estate markets evolve, the opportunity to provide liquidity to limited partners in real estate funds will remain a key focus for investment firms like Neuberger Berman.
The success of RESOF II is an indication that this approach resonates with institutional investors who are seeking ways to manage their real estate exposure and balance their portfolios. The continued growth of the secondary market presents a promising opportunity for firms that can navigate its complexities and offer tailored investment solutions.
In the broader context of global investment trends, the rise of real estate secondaries reflects a shift towards more flexible and dynamic investment strategies. As markets become more volatile and uncertain, institutional investors are increasingly looking for ways to optimize their portfolios and reduce risk.
Real estate secondaries offer a unique way to achieve this by providing a way to exit investments early and recapture value, all while maintaining exposure to attractive real estate assets. Neuberger Berman’s successful closure of its $1.05 billion fund demonstrates the increasing importance of these types of investment strategies in the evolving investment landscape.
The real estate secondary market is expected to grow as institutional investors increasingly seek flexibility and liquidity in their portfolios. Neuberger Berman’s success in raising over $1 billion for RESOF II places it in an advantageous position to continue capitalizing on this trend.
The firm’s expertise in real estate secondaries, combined with its bottom-up investment strategy, allows it to identify high-quality opportunities and offer compelling risk-adjusted returns to its investors. As more investors seek liquidity options and the market for real estate secondaries continues to grow, Neuberger Berman’s leadership in this space positions it well for long-term success.
Real estate secondaries have become an important part of the global real estate investment landscape. As institutional investors look for ways to manage their exposure to real estate, secondary market opportunities are expected to continue to rise. Neuberger Berman’s ability to attract over $1 billion in capital for its real estate secondaries fund is a clear indication that these types of investment strategies are gaining traction.
The firm’s ability to execute its bottom-up, asset-by-asset underwriting strategy will continue to serve as a key competitive advantage in the growing real estate secondaries market. As the market for real estate secondaries expands, firms like Neuberger Berman will continue to play a crucial role in providing liquidity solutions and creating value for investors.
