Neuberger Berman launches RE secondaries platform

The firm hired an executive from Deutsche Bank’s secondaries business to lead the venture.

Neuberger Berman is expanding into the real estate secondaries business, the New York-based asset management firm said on Monday.

The firm hired Scott Koenig, who joined the firm’s New York office in June from Deutsche Bank, to lead the new venture. He is focusing on acquiring fund interests from real estate portfolios globally, particularly in the US and Europe.

“Our investors over the years have asked why we hadn’t done real estate secondaries,” Brian Talbot, Neuberger’s founder and co-head of secondaries, told sister publication PERE. “It wasn’t a situation where we didn’t like real estate; we didn’t feel like we had the expertise to evaluate these types of deals. It wasn’t our skill set.”

The real estate secondaries business will operate similarly to the existing private equity platform, focusing largely on acquiring stakes in individual funds, without a focus on a particular property type, Talbot said. He declined to comment on how the real estate business will be capitalised.

In the next year, the firm plans to establish its real estate footprint and build out the team under Koenig, he added.

The firm closed its fourth private equity secondaries fund in January on $2.5 billion, above its $2 billion target. NB Secondary Opportunities Fund IV’s transaction size is $20 million to $25 million, with a focus on acquiring investor stakes in private equity funds, direct investments, co-investments and structured private equity.

“We think that real estate secondaries is very complementary to what we’re doing in private equity secondaries,” Koenig said. “Neuberger Berman has built a long and successful track record in private equity secondaries. The combination of what I’d been doing at Deutsche Bank in the secondaries space and before that in more direct real estate, along with what we’ve built at Neuberger Berman, is powerful.”

Koenig previously founded and led Deutsche Bank’s real estate secondaries platform in New York. He worked at Deutsche for 16 years, and was previously a senior underwriter at Tokyo-based investment bank Nomura Securities, according to his LinkedIn profile. Deutsche could not be reached for comment.

Last month, Jason Sambanju, the bank’s Asia secondaries head, departed after three years in the role, Secondaries Investor reported at the time. He left Deutsche to establish Foundation Private Equity, a Singapore-based firm focused on investing in secondaries in Asian private equity, according to its website.

In May Neuberger hired Coller Capital principal Philipp Patschkowski in its London office to help build its European private equity business, including fund investing and co-investing, as Secondaries Investor reported.

Neuberger managed $267 billion overall as of March 31, according to Monday’s statement.

The firm is entering the real estate secondaries space as capital flows to the strategy have slowed considerably, according to PERE data. Managers raised $387.7 million for real estate secondaries in the first half of 2017, compared with $550 million over the same period in 2016 and $2.1 billion in the first half of 2015.