Neuberger Berman Fund Adds Halcyon Stake

Jan 16 2013 | 2:08pm ET

Neuberger Berman Group's private equity fund of hedge funds had a feverish December, tripling the number of hedge fund managers in its portfolio during the month.

Dyal Capital Partners' buying spree, which coincided with its closing at $1.28 billion, concluded on Dec. 21 with the purchase of a minority stake in Halcyon Asset Management, Hedge Fund Alert reports. New York-based Halcyon is one of the oldest hedge funds around, founded in 1981, and manages $12 billion; the firm had planned to go public several years ago but shelved those plans in the face of the financial crisis.

Dyal took a passive 20% stake in Halcyon, its fourth such deal in December: The fund also bought passive minority stakes in MKP Capital Management, Pinnacle Asset Management and Scopita Fund Management during the month. And as with the other deals, Halcyon will invest the proceeds in its funds.

"We believe that with our recent transactions, Dyal has a well-diversified portfolio of six minority stakes in leading hedge fund firms," Dyal co-manager Sean Ward told HFA. "That being said, many attractive opportunities continue to exist, particularly in the U.K., and we will continue to actively pursue potential deals this year."

Dyal has said that it plans to eventually have a portfolio of between 12 and 15 established hedge fund managers.

Halcyon is the largest hedge fund backed by Dyal to date, with roughly twice the assets of MKP, which manages $6 billion.

The pace of Dyal's activities last month—HFA suggests it might be a record for hedge fund backers—is not a complete surprise; when it announced its closing, the fund said it expected to finalize several deals within a few months. The two-and-a-half year old fund had previously invested in Capital Fund Management and Mast Capital Management. With the Halcyon deal, Dyal has spent about half of the money it raised, according to HFA.


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