Neuberger collects $150m for hedge fund stakes

The asset manager's Dyal Capital Partners fund aims to raise $1bn to buy stakes in hedge fund management companies.

Neuberger Berman, which manages more than $170 billion in assets, has collected $150 million for a fund that will buy stakes in hedge fund management companies. The asset manager ultimately aims to raise $1 billion for the vehicle, which is structured like a typical private equity fund.

Neuberger Berman declined to comment. Information about the fund was included in a regulatory filing with the US Securities and Exchange Commission.

Dubbed Dyal Capital Partners, the fund is run by Neuberger executive Michael Rees. Rees and other executives have experience buying stakes in hedge fund management companies, especially while Neuberger was still a part of Lehman Brothers.

A group of Neuberger managers spun out of Lehman Brothers last year and set up the independent asset manager.

Neuberger’s alternatives division, called NB Alternatives, has raised 18 funds of funds vehicles, including its most recent $1.5 billion fund that closed in 2007. NB Alternatives had $14 billion of assets under management as of 31 December, 2009. The division also runs private equity secondaries and co-investments.

In June, the firm reported it had raised $197.2 million for a new vehicle, NB Distressed Debt Investment Fund, which started trading on the London Stock Exchange’s specialist fund market in June.

Anthony Tutrone, who runs NB Alternatives, said earlier this year the division was working to trim down its GP relationships, sticking with GPs who delivered the best performance but also met high levels of governance and transparency standards.

“We’ve found enough firms out there who can deliver the returns we’re looking for,” Tutrone said. “One of the lessons we learned [in the downturn], is that we want openness … transparency, because our clients expect that from us as a fund of funds.”