Neuberger Berman Group has launched a private equity fund that will invest in hedge fund firms.
The firm, which spun off from Lehman Brothers last year, has tapped Michael Rees and Andrew Komaroff, two Neuberger executives who worked in a Lehman unit that also invested in hedge fund managers before the investment bank collapsed two years ago, to head Dyal Capital Partners. Neuberger said in a regulatory filing that it has already raised $150 million for Dyal, which will be similar to Goldman Sachs’ Petershill fund, which has taken minority stakes in six hedge fund firms, including Capula Investment Management, Level Global Investors and Winton Capital Management.
Dyal plans to invest in between 12 and 15 hedge fund firms. But the fund is not looking to seed startups, instead focusing on hedge funds that already manage between $1 billion and $6 billion, particularly those that boast major pension funds as clients. Dyal will take a share of each manager’s fee income, and is targeting annual returns of 25% or more, Bloomberg News reports.
At Lehman, Rees and Komaroff were part of a group that invested about $2 billion in some of the biggest names in the hedge fund industry, taking minority stakes in D.E. Shaw Group, GLG Partners, Marble Bar Asset Management, Ospraie Management and Spinnaker Capital Group.
The minimum invested requirement in Dyal is $10 million.