Dyal Capital Partners, a private equity fund managed by Neuberger Berman Group that takes passive minority stakes in hedge fund managers, closed to new investors with $1.28 billion of commitments from 40 institutional investors, including pension funds, endowments, foundations, insurance companies, sovereign wealth funds and Taft-Hartley plans.
The fund was launched in December 2011 with a fundraising goal of $1 billion. To date, the fund has taken minority stakes in Capital Fund Management and MAST Capital Management, confirmed Alexander Samuelson, a Neuberger Berman spokesman.
The fund will take 20% passive ownership stakes in 12 to 15 hedge fund managers with assets ranging from $1 billion to $6 billion. A share of fee income from the underlying hedge fund managers will be distributed to its investors, providing an annual yield that could exceed 25%, said a source with knowledge of Dyal Capital Partners who asked not to be identified.
Mr. Samuelson declined to comment on the specific terms of the private equity fund.
“We are excited to have such a high-quality group of institutional investors that partnered with us on an investment opportunity as unique as Dyal,” said Michael Rees, a Neuberger Berman managing director who leads the fund's investment team, in a company news release.
Institutions invested in Dyal Capital Partners include the New Jersey Division of Investment, Trenton, which committed up to $200 million to the fund in August this year on behalf of the $71.8 billion New Jersey state pension plans, and the $8 billion endowment of University of Michigan, Ann Arbor, which committed $50 million to the fund in December 2011.